CNN LATE EDITION WITH WOLF BLITZER

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. WOLF BLITZER, HOST: It's noon in Washington and New York; 9:00 a.m. in Los Angeles; 9:30 p.m. in Kabul, Afghanistan; and 10:00 p.m. in Islamabad, Pakistan. Wherever you're watching from around the world, thanks for joining us for this special three-hour LATE EDITION.

We'll get to our interview with the U.S. Treasury Secretary Paul O'Neill shortly, but first we're following two major stories, the war in Afghanistan and a huge scientific breakthrough that's just been reported: the first cloned human embryo.

I'll talk with one of the scientists involved in this break through in just a few moments. But first, let's check the latest developments in the war in Afghanistan.

(NEWSBREAK)

BLITZER: And let's follow up on that other major story we're following this morning, the first successful cloning of a human embryo.

Scientists at Advanced Cell Technology, a biotech company in Massachusetts, have been working on the project over the past several months. The finding could mean breakthroughs for treatments and diseases like Parkinson's, diabetes, spinal cord disabilities.

A short while ago I spoke with one of the doctors leading the project, Dr. Michael West.

(BEGIN VIDEOTAPE)

BLITZER: Dr. West, thank you so much for joining us.

And briefly tell us and our viewers in the United States and around the world, what exactly have you done?

DR. MICHAEL WEST, ADVANCED CELL TECHNOLOGY: Well, we've taken the first step toward what we hope will be a whole new era of medicine. It's been called regenerative medicine. The idea is to be able to do something we've never been able to do before, as simple as it sounds, to give replacement cells and tissues, like the way we repair a car when it's broken. We've never been able to do it in human medicine. So if you lose cells in pancreas that regulate sugar levels that give you diabetes, we can't cure that today. We can help make it better with insulin.

But to make replacement cells or tissues is the goal of medicine. We've taken the first steps toward doing that using a controversial, though we think promising, technique, cloning.

BLITZER: The cloning, though, when people hear that word they get very, very nervous, a lot of people out there, because they assume it's going to result in cloning of human beings.

WEST: Right.

You know, I think it's paralleled in some ways to in vitro fertilization. Just some 10, 20 years ago, when scientists said they wanted to help people who are infertile by making test-tube babies, it scared a lot of people, it reminded them of Brave New World.

And in the same way, now, 20 years later, when we talk about using cloning technology for transplantation, if you're diabetes, for instance, people say, isn't this Brave New World? And it scares people.

And I can understand the immediate reaction, but what I don't understand is that thoughtful bodies, like the U.S. Congress, would overreact, as the House did recently, saying let's ban all the uses of cloning, even in human medicine. I can't understand that.

BLITZER: You have cloned a human embryo, is that what you're saying?

WEST: What we're saying is that we've done the first step toward what we call therapeutic cloning. And what the technique was, as you said is true, it would be the first step also in cloning a human, is to take a human egg cell, remove its DNA. So now we have the beginnings of life with no blueprint. And we put a human cell from a different person, in one case, into that egg cell.

The egg cell then does somewhat, I say "magic," in, you know, in apostrophes. It does wonderful things. It takes the patient's cell back in time, so that it's embryonic again. And it's sort of, you know, back to the trunk of the tree of cellular life. So that we could then make anything identical to the patient. That's our dream.

As you pointed out, it could also be used -- it could go down a different road. We could implant those cells into a woman's uterus and make a cloned human being. But that's not what we're doing.

BLITZER: What's to stop someone? You don't want to clone a human being. You want to use these clones, these cell clones in order to cure Parkinson's or diabetes or an individual who's paralyzed...

WEST: Right.

BLITZER: You think you can do that. WEST: Yes.

BLITZER: But what's to stop someone from using the technology, the breakthrough that you've come up with, and try to clone a human being?

WEST: Well, in the United States, one thing to prevent that is that there's regulations. The Food and Drug Administration regulates human reproductive cloning. So, if you wanted to go into a clinic and have yourself cloned, you know, look up in our scientific paper and say Advanced Cell used these particular chemicals and, you know, here's the recipe, I want to go be cloned, the Food and Drug Administration would come in and stop that effort.

BLITZER: But there wouldn't be any stopping of an effort outside of the United States, necessarily?

WEST: That's true.

BLITZER: So somebody living in some other country could presumably use your medical breakthrough and try to clone a human being.

WEST: I think that's true.

BLITZER: With all the serious ramifications. Did that weigh heavily on your mind?

WEST: It did. And so we sat down and decided, look, if we published this result, we're making it that much more easy for someone to clone a human being. We maybe have accelerated the cloning of a human being a few weeks or months, so they won't have to try this or that in a batch of chemicals.

But when we weigh, on the other hand of the balance, the potential benefit for human lives, people suffering from Parkinson's and diabetes and spinal cord injury and this long list of disorders that could be cured using this technology, then we felt that it's so much more urgent to rapidly go and try to help these people who are sick.

And the concern about cloning of humans, given that we have regulations in the United States that prevent that, we felt that we should go forward and publish this scientific result so scientists can have this data.

BLITZER: Well, a lot of our viewers know people who suffer from these diseases. They want to know, how long is it going to take for what you have done to have a practical impact on their lives?

WEST: Well, there is one big variable here, and that's the U.S. Congress. The House of Representatives voted to criminalize even the medical uses of cloning, which I think was shortsighted.

I think there should have been a dispassionate and carefully reasoned debate. Two hours of debate to determine the fate of millions of human beings. And no one disputes that millions of human lives, people who are sick, is at stake. Two hours of debate, I think, was careless, to be nice.

The U.S. Senate has to decide this issue now. And I'm hopeful that if we can find a way to allow this miracle of cloning to be used for the good and to prevent any bad, then I think the scientific community would rapidly implement it. And maybe within 10 years, we might see the first applications in human medicine.

BLITZER: It's going to take that long to be able to translate what you have done into some practical therapeutic benefit?

WEST: That's a good point. These are the first halting steps toward this new area of medicine. And we shouldn't, you know, have illusions that we can go, even with positive response by the U.S. Congress and the president, we should not be under the illusion that next week, next year our loved ones are going to be helped with this technology. It's going to take some time.

BLITZER: The cloned cell that you have now developed, the embryo, it came from an individual, a male, and it came from a female. The ethical ramifications of that to many of our viewers, to many people out there, are going to say, "This is the beginning of life. This is a human being."

WEST: Yes. That's another area that needs to be very carefully explored. The pro-life community, at least some members of the pro- life community, have used therapeutic cloning as a new way, a new initiative in the pro-life debate, saying that these are human life and we're talking about making and destroying human life: Fundamentally, biologically wrong.

We're talking about making human cellular life, not a human life. A human life, we know scientifically, begins upwards, even into two weeks of human development, where this little ball of cells decides I'm going to become one person or I am going to be two persons. It hasn't yet decided.

No cells of the body of any kind exist in this little ball of cells, and that's as far as we believe it's appropriate to go in applying cloning to medicine.

BLITZER: Is one of the reasons why you decided to publish your paper, your work, right now is to try to influence legislation here in Washington?

WEST: Actually, no. We're a bit obsessive. I'm just trying to help people who are sick, and really that's our focus. And time is of the essence for people that are dying of life threatening disease, and that's really what's our time schedule. We want to apply these technologies as fast as we can, of course, with appropriate debate, appropriate oversight. But I think, you know, time is of the essence. There are people who cannot wait.

BLITZER: And just to clarify, you definitely want to differentiate what you're doing to those other scientists like Dr. Panos Zavios (ph) and others who want to clone human beings.

WEST: My primary point -- I disagree with these people -- is, you know, cloning even of animals like cattle, where we're quite efficient at cloning cattle now and getting normal animals, nevertheless, it would be like saying, here's a rocket on a launch pad. Admittedly, 20 percent of the time the rocket explodes at launch. And these individuals are out there saying, "Women and children, aboard. Let's go."

Cloning is not ready. It's not known to be safe, either for the woman carrying the pregnancy or for the developing human being itself. And that's our primary concern.

I think these people need some reins put on them. They need to slow down. Any application in reproduction needs to be shown that it would be safe before we can proceed.

BLITZER: Dr. West, thanks for joining us.

WEST: Thank you.

(END VIDEOTAPE)

BLITZER: And when we return, we'll ask two leading members of the U.S. Senate about this breakthrough in human cloning. And also, the latest on the war in Afghanistan.

Two members of the U.S. Senate Intelligence Committee will join me, Democrat Dick Durbin of Illinois and Republican Richard Lugar of Indiana.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to this special LATE EDITION.

We're joined now by two members of the Senate Intelligence Committee, Illinois Democrat Dick Durbin and Indiana Republican Richard Lugar.

Senators, thanks for joining us.

I want to talk about the war in Afghanistan in just a moment. But this breakthrough in human cloning, Senator Lugar, you heard Dr. West say he hopes the Senate will be more deliberative than the House of Representatives in considering the legislation that would potentially ban this kind of therapeutic human cloning. What's your reaction?

SEN. RICHARD LUGAR (R), INDIANA: Well, the Senate should be deliberative. Without agreeing necessarily with Dr. West's proposition, this is an extremely complex development. I've been reading about it quickly in Scientific America, where the article appeared, and that there's a lot more I would want to reread a good number of times. I think my colleagues will want to reread it. Eventually, we have to take some responsibility. We really ought to take it on the basis of much more thorough understanding than this first report.

BLITZER: Two hours of deliberation in the House of Representatives. You were once a member of the House. What should the Senate do right now?

SEN. RICHARD DURBIN (D), ILLINOIS: Didn't George Washington say that the Senate was the saucer that cooled the tea? And that's what's going to happen here. The emotions of the moment, the debate over human cloning and such, I think, are going to come into perspective. And with this new breakthrough, the Senate will step back and say we can see that we can't stop the march of science; where do we want the draw the proper public policy and moral lines?

And of course, I listened to your interview with Dr. West. Some of the things that he's suggesting would be breakthroughs. There are people out there watching this show who may have relatives with Parkinson's and Alzheimer's and diabetes, spinal injuries, and they see hope in his announcement.

We, in the Senate, have to draw that line so it's a reasonable line, so we can continue medical science and breakthroughs, without crossing that line into something none of us want to see.

BLITZER: Could you envisage, Senator Lugar, supporting some kind of compromise on this whereby the therapeutic purposes to deal with these medical problems could be dealt with while taking steps to prevent the actual cloning of a human being?

LUGAR: I think that's conceivable. Certainly, when President Bush gave his message to the nation -- and he did so in a very up- front, visible way.

BLITZER: On stem cell research.

LUGAR: On stem cell research.

Now, a great deal of criticism on all sides of that, but it came after a very deliberative process by the president, his advisers, that went on for days, all sorts of advisers coming in. We really deserve the same sort of consideration.

And I thought it was interesting the question you asked Dr. West, if that experimentation can proceed overseas quite apart from what the U.S. Congress does. Well, of course the answer is yes. This is a big world.

Now, then the question would be -- let's say things do progress in that way. We don't have some agreements internationally or some understanding of what happens with the flow of cells or, worse still, embryos and bodies and so forth.

Now, that's why this is extremely complex and requires a lot of thought from the very beginning. BLITZER: And would you want to see some sort of international restrictions imposed on this kind of scientific breakthrough?

DURBIN: You know, that's hard to do. I think when you consider the possibilities of scientific advancement around the world, it's really hard to establish a protocol that every laboratory, every country on earth might follow.

But I agree with Senator Lugar. If the civilized nations of the world can come together and establish a standard which says we want the therapy, we want the advances in medicine, but we don't want to cross that line of the human cloning, that would be in the best interest of humanity and its future.

BLITZER: So I hear both of you suggesting you're open-minded on this right now. You're not ready to just follow the lead of the House of Representatives?

DURBIN: That's true.

LUGAR: I'm not.

BLITZER: OK. Let's move on and talk about the war in Afghanistan. Both of you are members of the Intelligence Committee. You're following this, probably, closer than almost all Americans are right now.

How close do you believe, Senator Lugar, is the U.S. to finding Osama bin Laden?

LUGAR: I think we're very close. But as the president counseled, the nitty-gritty work of the special forces we won't see, we won't have reports on.

We like to follow the battles day by day and who's advancing or who is retreating, who is surrendering. That's not the war against al Qaeda. It is secretive by the very nature, has to be covert.

But nevertheless, the field is narrowing. And the president of Pakistan has assured us that he's sealed the borders, that he doesn't have bin Laden in Pakistan, doesn't want to have him there. That narrows the situation.

BLITZER: You saw that report in the paper today that Osama bin Laden may have been spotted in a place called Tora Bora, near Jalalabad in the northeastern corner of Afghanistan. Is that credible?

DURBIN: It could be. The report also went on to say that he was traveling by horseback at night.

And keep in mind, the tough task we give our military and intelligence community of finding one person in a country. That's not an easy thing to do, under the best of circumstances, with a cooperating government. But to have adversity and war going on and guerrillas moving in every direction in terrorism, it make it increasingly difficult.

That's become the symbol of our victory, but I think Senator Lugar and I would both agree, there are many more things which we'll have to do before we can declare any kind of real victory.

BLITZER: Are you satisfied with the level of U.S. intelligence right now? You're briefed, obviously, on all of these matters. Because there was, as you know, widespread criticism that the intelligence community was surprised by the September 11 attack.

LUGAR: Well, I won't debate that issue, and I think we ought to lay that aside fore a while, although it's a relevant question.

But I'm impressed with the sharing that is coming in from our new allies and the combination of these factors. That's so important. We can't do it all by ourselves. And our people are very good at it, but they're getting a lot of help.

BLITZER: Are you satisfied, Senator Durbin?

DURBIN: I am. I think the most encouraging thing we've heard from the intelligence community is the level of cooperation. Before September 11, the United States would contact even our best and strongest allies to talk about terrorists cells and threats and really get the cold shoulder. But since September 11, that's changed.

BLITZER: Across the board?

DURBIN: Well, I can't say for every country, but for most of the major nations of the world who are part of our effort, they are cooperating. We see reports in the newspaper of arrests that are being made in Spain, Australia or other countries.

BLITZER: Well, what about in the Middle East, like Saudia Arabia? Are the Saudis fully cooperating?.

DURBIN: Well, I can't -- I can't make that judgment. All I can say is that the administration tells us repeatedly that they're doing many things behind the scenes that are very, very helpful.

BLITZER: You agree with that?

LUGAR: Well, the administration makes the point that they're thoughtful about what we're asking the Saudis. And when we ask the Saudis to respond affirmatively, that covers a lot of ambiguities.

LUGAR: Yes. They are very thoughtful about what they want to do, because they're mindful of the pressures upon the Saudi government.

Now, a good number of people don't like the Saudi government, but nevertheless, our administration does feel we need to have stability of governments while we're fighting this war against al Qaeda. BLITZER: And all the criticism that we've have heard in recent weeks that inside the U.S. intelligence community, Senator Durbin, not enough Arabic speakers or Pashtun speakers or people who really understand what's going on and the restraints that U.S. case workers, case officers couldn't penetrate these kinds of groups because they'd have to be paying off certain very shady characters.

DURBIN: Well, I think some of those criticisms were very real. You remember the appeal right after September 11 for those who could speak Arabic, or some of the dialects involved in this war, to come forward. We need them. We desperately need them to be part of this effort, so that we can to sift through the mountains of information we collect.

And there's no doubt about it, as you see what's happening with the Northern Alliance, it's kind of a negotiation process, as they go to the heads of different tribes and try to negotiate either a dollar amount or a power-sharing agreement so they'll come to our side.

That's a difficult, delicate business, sometimes dirty. But if it achieves our end, in ending terrorism and bringing stability to Afghanistan, I think it's the right approach.

BLITZER: All right. We're going to take a quick break. A lot more to talk about.

When we come back, more with Senators Lugar and Durbin, including your phone calls. LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're continuing our conversation with Democratic Senator Dick Durbin of Illinois and Republican Senator Richard Lugar of Indiana, both members of the Intelligence Committee.

Senator Lugar, you heard Donald Rumsfeld, the defense secretary, say he would prefer that Osama bin Laden be captured dead rather than alive. Do you agree with that?

LUGAR: Yes, I think that would be preferable. But I'm not certain we'll have that option. So the important thing is to identify him, make certain that we have him.

BLITZER: And, if he's captured alive, though, that does open up a lot of potential problems, in terms of a trial and holding him, and, if you execute him, does that open up the U.S. to retaliatory strikes?

DURBIN: It is a big mess. And I could -- look what happened with the Spanish in the last few days. They have said that our cause is just and what we're doing, but they don't believe our system of justice is. And there's a question about whether they will extradite terrorists to the United States for trial by military tribunal.

BLITZER: Well, it's not just because of the military tribunal, it's also... DURBIN: Death penalty.

BLITZER: ... because the United States has the death penalty.

DURBIN: And the death penalty, of course.

BLITZER: And the Europeans don't like that.

DURBIN: And when you try to project this situation to an Osama bin Laden or his lieutenants, extradition may become argumentative. If he dies in the course of war in defending his cause and so forth, I think that's a just result.

But if we have to go to the next step, of picking a tribunal, going through extradition, making certain that we meet certain international criteria, this could become very complicated.

BLITZER: Do you support President Bush and Attorney General Ashcroft in this decision to have these military tribunals, whereby the evidence can be kept secret, testimony can be kept secret, and that they could execute someone on the basis of this kind of secret proceeding?

LUGAR: Yes, I do. I think they pertain to people who are not United States citizens, who in fact are persons who were in battle, were engaged in fighting against the United States. The Geneva Code allows the shooting of spies, that's been a regular process for a long time.

To make a case that those who flew into the towers in New York were spies in the same sort of intrusion -- in other words, the fastidiousness that seems to attend people who are now fighting the United States of America, killing Americans, is something that is interesting,

But to answer your question, I think that Bush is on the right track.

BLITZER: It's an extraordinary time, though.

Many of your Democratic colleagues, Senator Durbin, are concerned about these extrajudicial procedures.

DURBIN: Well, military tribunals go back to George Washington, Abraham Lincoln, Franklin Roosevelt. They've been found to be legal and constitutional.

I think the difference here is the fact that, just a few weeks ago, the administration asked us for new authority to declare certain crimes terrorism so they could be tried in the courts of America. And also we are sensitive to the fact that we want to not only appear to be just but be just in the administration of justice, whether it applies to Americans or otherwise.

I think the administration, and the attorney general specifically, need to come forward in the next week or so and spell out in more detail what the lines are, how they'll draw them and define them, in terms of applying these military tribunals.

BLITZER: What about the next step in this war against terrorism? President Bush, in his speech on Wednesday, seemed to be suggesting there would be other targets, maybe even Iraq. Listen to this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Afghanistan is just the beginning on the war against terror. There are other terrorists who threaten America and our friends, and there are other nations willing to sponsor them. We will not be secure as a nation until all these threats are defeated. Across the world and across the years, we will fight these evil ones and we will win.

(END VIDEO CLIP)

BLITZER: And in the new issue, Senator Lugar, of Newsweek magazine that's just out today, there's an interview with President Bush and Mrs. Bush. Among other things, the president does say Saddam Hussein is an evil man.

And he goes on to say this: "I think Saddam Hussein is up to no good. I think he's got weapons of mass destruction. And I think he needs to open up his country to let us inspect. I think he needs to be held accountable and needs to conform the agreement he made years ago."

LUGAR: Well, let me follow through on that point, Wolf. It seems to me that there are two factors in this war. One is to isolate al Qaeda and other terrorists, wherever they may be. Many, many countries may harbor them. So, ad seriatim, you could go through a good roster.

The other factor is the weapons of mass destruction. How do we make certain we have accounted for all of them in this world, that they are secure, that is, they're locked up; that there is a program for destruction in many cases, while respecting the sovereignty of various countries that may have them, including Russia and the United States?

Now, if Iraq had weapons of mass destruction, the world needs to know about that. We need to know about every one of them.

The question is, will Saddam cooperate, whether it be with the U.N. or with our new coalition, with the United States? That's the issue, and I think the president was pointing to that. It's not a question of Saddam per se. It's a question of the weapons of mass destruction and/or terrorist cells. We're after both of those.

Now, if the Iraqis cooperate, fair enough. If they don't, there's likely to be a war in Iraq. But we need to prepare for that, we need to set the stage for that, if that is our objective.

BLITZER: Are you ready for that?

DURBIN: Well, of course, when you consider how that might play out, it has a lot of challenges for us.

But I certainly agree with Senator Lugar. And he's been a leader, I might add, with former Senator Sam Nunn, in this non- proliferation effort, to try to find these weapons of mass destruction and to do away with them.

And I think Saddam Hussein has to play by the rules here. If he doesn't play by the rules, in terms of the weapons of mass destruction and sponsoring terrorism, he's going to pay the price. And the price may not be the direct invasion of the United States, but it could be a lot more effort than we've seen over the last 10 years.

BLITZER: Senator Durbin, Senator Lugar, thanks for joining us.

DURBIN: You're welcome.

LUGAR: Thank you.

BLITZER: Appreciate it.

When we return, a conversation with the treasury secretary of the United States, Paul O'Neill, about the Bush administration's game plan for reviving the ailing U.S. economy. LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

Earlier today I spoke with the U.S. treasury secretary, Paul O'Neill, about plans for getting the U.S. wartime economy back on track.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Secretary, welcome back to LATE EDITION. Thanks for joining us.

How much is the war on terrorism costing the U.S. government right now, the Treasury?

PAUL O'NEILL, TREASURY SECRETARY: I don't have a good number for incremental costs, but certainly it's costing us something. Some of the money that was in the $40 billion that the Congress voted was for defense purposes. And it's going to run up. We will see when it's all done how much it's going to be.

But, you know, a $10 trillion economy, we can absorb the cost of fighting terrorism, and we will because it's the most important thing. We've got to put it behind us.

BLITZER: There's been some estimates that the military campaign alone is costing about $1 billion a month. And it's obviously continuing. Are other nations contributing to those expenditures, as they did during the Gulf War 10 years ago? O'NEILL: So far what we're seeing is places like the U.K. are contributing in the sense that they're sending troops. Other places in Europe are sending troops and equipment and helping with intelligence. So, in a way, they're carrying part of the costs already.

BLITZER: But as you know, during the Gulf War, the then- secretary of state went out and he raised a lot of money from wealthy, oil-rich nations, other industrialized nations, to help the United States share in the burden of war then.

Is anything along those lines going on right now?

O'NEILL: Well, we may do that.

Last week Colin Powell and I hosted a conference here and invited 20-some-odd nations to meet with us to talk about how to work on creating a new Afghanistan when this war is over.

Now, the Taliban and what's been happening in Afghanistan for the last 25 years or so has left the place devastated. There is no order. There is no discipline. There is no civil society. And it's clear that we and the other civilized nations are going to have to turn to and provide some resources so that we help them got on a stable footing.

BLITZER: In addition to the direct costs, $40 billion or whatever, that the U.S. administration, the Bush administration, has been forced to ask Congress for emergency appropriations, do you have any rough estimate of the indirect cost to the American economy that the September 11 attacks against the United States have resulted in?

O'NEILL: Well, I'll tell you a way to think about the indirect costs on the economy. On September 10, I think the data now fairly conclusively show that our U.S. economy was in a recovery period. And the difference between being in a recovery period and then having a negative growth in the third quarter, which included the time after September 11, I think is a direct cost to the American economy. And it's maybe 1 percent of our gross domestic product is what we've suffered so far.

It's why we need the stimulus package. I think we've recovered a good part of the loss we had after September 11, but we need to do better. We need to be growing at 3.5 percent in real growth as we go forward. And what the president has called for in $75 billion worth of stimulus, we think, would help to ensure that we're going to get there.

BLITZER: As you know, there was negative growth in the last quarter.

O'NEILL: Right.

BLITZER: Do you think there's going to be negative growth in this current quarter, as well? O'NEILL: I don't think we know yet. You know, I think we'll let the data speak for itself. The encouraging news over this weekend, I saw some data earlier this morning indicating the retail sales were 4 percent better this year than last year for Friday. And Wal-Mart, one of the biggest chains had, I think, $1.25 billion worth of sales. It was their record sales day for them.

I think our economy is coming back. We need to make sure it keeps coming back and that we get back to those good growth rates.

BLITZER: So what you're suggesting is there may not be two consecutive quarters of negative growth, which is a technical definition of a recession?

O'NEILL: I would like think that's right, but the Senate has dithered an awful long time in responding to the president's request for a stimulus package. Hopefully this next week, when they come back from their week-long Thanksgiving recess, they will finally just pull together and the Senate will come to a position, and we can negotiate a final stimulus package.

BLITZER: Well, one of the reasons there's been this stalemate between the Republicans and Democrats on Capitol Hill are some fundamental differences between the two parties, the leadership of the two parties.

You probably saw that article in The Washington Post, which noted that if you eliminate the minimum taxes that corporations would have to pay, which is what the Republicans want to do, the Citizens for Tax Justice, which is an advocacy group here in Washington, estimates that would save some 16 Fortune 500 companies $7 billion.

IBM, for example, would benefit with $1.4 billion; Ford Motor Company, a billion. Look at this -- General Motors, $833 million; General Electric, almost $700 million; Chevron Texaco, almost $600 million.

O'NEILL: However, the things you're showing on the screen are not what the president recommended.

The president said we need to help consumers. We need to provide $300 per person for people who didn't get anything in the tax cuts that were enacted earlier this year. He said we should accelerate rate cuts that have already been enacted and have been delayed until 2003 and 2004.

And that we need to do something to provide accelerated depreciation for businesses, so that we can be sure that we maintain job security for individuals and increase the number of jobs out there. Our best estimate is the president's package would create 300,000 new jobs on top of the ones that are in the economy. We think that makes sense. It makes sense also to do something for people who were directly effected by the events of September the 11th. The president has proposed to do that.

And so, we're anxious to get on with it. And we prefer this not to be a partisan squabble. This needs to be about what's right for the American people.

BLITZER: So the basic difference -- you're saying there's a basic difference between the Bush administration, you, and the House Republicans, which want to see that minimum tax, retroactive going back to 1986, to enable these corporations to reap these benefits?

O'NEILL: I think, if you look at the House bill, you can find in it the fundamental elements the president asked for. There are some other things that they felt should be done. The elements the president wanted are in the House bill.

The Senate needs to get its act together. At the moment, the only place that we need action is in the Senate. Once the Senate acts, they can get together with the House and we can put a bill on the president's desk.

And then we can get on with other things we need to do. We need to get trade promotion authority enacted, so that we can get on with negotiating ever-better trade for American goods offshore. We need to do something about terrorism risk insurance. That's an issue not tended yet by the Congress. So there are other things to do, Wolf.

BLITZER: Tom Daschle says there's a fundamental difference. He's the Senate majority leader. Listen to what he said earlier today.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: That's exactly what we want to do: spur consumption, try to create additional demand. And that is probably as fundamental a difference between our parties right now, as we try to resolve this economic stimulus question.

(END VIDEO CLIP)

BLITZER: In other words, he's saying, don't focus in on the tax cuts for the big corporations; focus in on the benefits, getting more money in to consumers' hands so they can start to stimulate the economy.

O'NEILL: Well, what the president has recommended is really not about tax cuts for big corporations. It's about accelerating depreciation for businesses of all sizes. Most businesses in the United States are small businesses. They would all have more cash to provide job security and job creation.

And, you know, I think this should not be about partisan division. And on the spending side, some of the things the senator is talking about is putting more meat bison meat in government warehouses. That doesn't seem like a stimulus idea to us. (END VIDEOTAPE)

BLITZER: We have to take a quick break. When we come back, more of my conversation with the treasury secretary, Paul O'Neill. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We return now to my interview with the U.S. treasury secretary, Paul O'Neill.

(BEGIN VIDEOTAPE)

BLITZER: You talk about the bailouts. The airline industry got a huge bailout. The insurance industry now wants a bailout from the federal government. Some are saying, where do the bailouts end?

How far should the federal government go in helping these industries, which are suffering? Let's take the insurance industry for an example.

O'NEILL: Well, let's talk, first of all, about the airline industry. There was a broad agreement across the whole political spectrum that we should not let all of the airlines go down because the government, basically shut them down for a week and they were down to 40 percent even when they started up again.

And so there was $5 billion provided and part of that has now gone to airlines. The other $10 billion is in the form of loan guarantees. So far none of them have been approved.

On the issue of insurance company bailouts, it's simply a mischaracterization of what's afoot here. No one that I know is proposing to give a single insurance company a single penny.

What's been proposed and even moved by the Banking Committee in the Senate is a provision that would make it possible for insurance companies to continue to write terrorism risk insurance. Without it, financing costs are going to go up. Some projects will not be able to go ahead if there's not an ability to write insurance.

And this is not about bailing out insurance companies. This is about ensuring that our economy can continue to function.

BLITZER: What you are saying is you would support a provision in this provision that would make the federal government liable for a future terrorist operations, not the insurance companies themselves?

O'NEILL: Well, one thing people need to understand, the insurance companies don't take any risk. They collect premiums for people who are at risk, and then if there's an untoward event, if there is a terrorist act, they use the money from all of the premiums to pay the costs that are associated with the terrorists act. Until September 11, they were -- effectively, they were providing insurance for free because there was not way they were collecting premiums associated with the costs that they saw on September 11.

So they're now saying, if we're going to do this, we can do it do a degree. But if we're fully responsible for every dollar, then we're going to have to collect the premiums that are associated with the possibility of $100 billion catastrophe, and the premiums are going to be enormous.

The real question is for terrorist acts, is there really a difference between a terrorist act and an act of war? And if there isn't really a difference, shouldn't we face the fact that the American people are going to have to pay for the cost of terrorist acts?

What we tried to do is write a piece of legislation that would provide a basis for the insurance companies to stay involved on a basis that's constructive. They are -- it's not a question of whether they're going to make a lot of money or not. They're not going to make a lot of money. They're going to collect enough premiums to pay for events when they happen.

BLITZER: All right. Before I let you go, I want to ask you about the freezing of the assets of terrorists, suspected terrorist organizations. The Treasury Department, which you head, of course, has issued a whole list, I think three different groups of various terrorists organizations around the world, freezing their assets.

Are you satisfied with the way other nations are following the U.S. lead in this area, specifically Saudi Arabia?

O'NEILL: I am.

You know, there's a lot more to do. I think we've just scratched the surface in terms of identifying these networks of evil that are using money, sometimes from unsuspecting sources. People who gave money thinking they were doing some good charitable cause, their money has been siphoned off into terrorist activity.

We have a full-fledged war going on against these terrorist financing organizations. And every nation that we've encountered and engaged, has been supportive. They've done what we've asked. We have now blocked over $57 million of terrorist money, including accounts that have hundreds of millions of dollars flowing through them in the last few years.

So I think we're well on our way, but we're not done.

BLITZER: Fifty-seven million dollars in the United States?

O'NEILL: Total, across the countries that have blocked assets.

BLITZER: And so every country that you've asked to follow the U.S. lead has done precisely that? You're not frustrated with any other country? O'NEILL: Well, you know, there are some places where double entry bookkeeping is a novel idea. This is a fairly common thing in advanced economies like our own. And so, the ability for some countries to act on our sophisticated intelligence is not as good as what we have. And therefore we're providing technical assistance to them to help them get in order so that they can act on these behind- the-scenes financial networks and help us in an even better way than they can now.

BLITZER: One thing -- another thing you said that some thought was sort of controversial last week in The Washington Post, dealing with U.S. support, international aid.

Among other things, you said this: "Over the last 50 years the world has spent an awful large amount of money in the name of development without a great deal of success. It's time for us to become determined and purposeful about making a difference in living conditions of the poor by increasing real economic development and not just more giving."

Some have suggested that means the United States is going to cut back on its international assistance programs.

O'NEILL: Wolf, I'm a person who, before I came here, ran a company with operations in 36 different countries, and I traveled those countries extensively. I know what poverty looks like. I know what it looks like to see a child born in the dust.

And I say, my heart breaks for the difference between our living standard and what exists in so many other places in the world. And I believe we should be determined that we are going to help them to develop.

But nothing is worse in my mind than throwing away money when these needs go untended. People have siphoned it off, they've done things that didn't make any sense.

So my determination is that we should be wonderfully efficient in helping other nations develop so that we can ask the American people for more resources for this purpose.

But until we can demonstrate we know what we're doing, it's awfully hard to day to people, "Give us more of your hard earned money." So I want to see and help produce performance, and then we have the right to ask for more help.

BLITZER: You had a spill this past week. You fell at football. How are you feeling?

O'NEILL: I'm fine. I was playing with my grown children and grandchildren, and I was the quarterback. And I was running; I was supposed to be throwing. I was running instead of throwing. I fell on the ball. And they say I only bruised them, but I tell you, if this is only a bruise, I'd hate to have broken bones.

BLITZER: So it hurts sometimes when you smile. O'NEILL: It hurts to breathe.

BLITZER: Really? Well, I hope you get better. The doctor said just rest and relax. There's not much you can do about it.

O'NEILL: Grit your teeth.

BLITZER: That's it. Well, we hope it goes quickly.

Thanks for joining us.

O'NEILL: Thank you.

(END VIDEOTAPE)

BLITZER: And just ahead, the second hour of LATE EDITION. We'll check the latest developments in the war against terrorism and the breakthrough in human cloning.

We'll also talk to two former U.S. transportations secretaries about new security measures that are affecting travelers.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We'll get to our former U.S. transportation secretaries and interview them in just a moment. But first, here's CNN's Donna Kelley in Atlanta with a quick check of all the latest developments.

(NEWSBREAK)

BLITZER: Meanwhile, as the holiday travel season gets under way, new aviation security measures are being implemented at U.S. airports.

Joining us now to talk about the impact on travelers are two former U.S. secretaries of transportation: Rodney Slater served as transportation secretary during the Clinton administration. James Buirnley served as transportation secretary during the Reagan administration.

Gentlemen, welcome to LATE EDITION.

And let me begin with you, Secretary Buirnley, and ask you, what is the single most important thing that the federal government should be doing right now to reassure American fliers that it's safe to get in an airplane?

JAMES BUIRNLEY, FORMER TRANSPORTATION SECRETARY: Well, there's a -- I'm sorry to not answer your question perfectly, there are two things they need to be doing, not just one.

The first thing is what they're doing, which is everything that can be down on an overnight basis: putting National Guard troops in visible positions, for example, tightening up supervision of the security. All of that matters, and that goes to the immediate need to restore confidence in the security of the system.

But the other big agenda is, with this bill that was just enacted into law, the U.S. Department of Transportation has got to move expeditiously on what is a huge undertaking, to create a whole new security system for us.

So those have to go on simultaneously.

BLITZER: That's 28,000 employees they have to find, have to do background checks.

Secretary Slater, that's going the take a long time, to come up with those new screeners who are going to be working at the airports.

RODNEY SLATER, FORMER TRANSPORTATION SECRETARY: Well, it's going to take quite a bit of time. But they actually have a deadline. They have the objective of having this work done within a year.

Secretary Mineta has already begun the process, reaching out to the industry and also communicating to the broader community about the desire to fill these jobs with gifted, talented individuals. And I think he's going to be successful in that regard.

BLITZER: Do you think that this new bureaucracy is going to work?

BUIRNLEY: It'll work, but it is impossible to overstate what an undertaking this is. I mean, it's not just creating 28,000 new jobs and filling them. They've also got to look from stem to stern at the whole security system, not just aviation but the new agency is supposed to tighten security across transportation. That means a lot of new regulatory activity, which will not all get done in the first year, but which has to get rolling in the first year.

BLITZER: Is it -- all of this is a reaction to the September 11 hijackings, four U.S. planes that were hijacked. And a lot of people have asked, Secretary Slater, why did it take that to get these kind of procedures in place, these additional security procedures?

SLATER: Well, we've actually had a number of studies over the years that have brought into place a lot of the technology, if you will, a lot of the focus on improving security and safety at our airports and within the aviation community.

But this was the first time where we actually had aircraft that were used as weapons themselves, and that did generate a significant focus of attention and is resulting in an overall review of the security procedures employed.

BLITZER: Well, you were the most recent secretary of transportation before Secretary Mineta at the end of the Clinton administration.

SLATER: That's right.

BLITZER: Did anyone ever say to you, any of the people that worked for you at the Department of Transportation or other branches, agencies in the U.S. government, law enforcement or intelligence, that there was a potential problem of suicide pilots out there, hijackers, that the U.S. had to worry about?

SLATER: No, the focus was principally on using some explosive device to actually bring a plane down. And we did employ a lot of the technology that's now in the airports. This technology that costs about a million dollars, we were able to successfully...

BLITZER: The metal detectors and all?

SLATER: That's right.

... successfully make an appeal to Congress, and we got about $300 million actually for the deployment of that technology.

And it is being used; it's going to be used even more so. And we're going to need even more of that equipment as we go forward with the new plan, the more comprehensive plan.

BLITZER: And nobody ever suggested when you were secretary of transportation, this goes back obviously in the '80s during the Reagan administration, that there was a problem of individuals going to flight-training schools to learn how to become pilots...

BUIRNLEY: No.

BLITZER: ... so that potentially they could hijack a plane and use it as a weapon?

BUIRNLEY: No. I mean, the idea was unthinkable except in the movies and in popular novels. And it did change everything. There's no question that that is a threat nobody seriously contemplated.

And I'm not surprised for Secretary Slater to say nobody came to him; similarly, nobody came to me. And you would have expected, if there was even a remote possibility of that, the intelligence agencies would have picked some indication of it up. And it just was not a part of the threat that we understood.

BLITZER: So the Department of Transportation now has to start looking at all these flight schools, these aviation schools, to see who is learning to become a pilot?

SLATER: Exactly. And we're working, meaning the industry, is working together in this regard, working with the Department of Transportation, working with the airlines, the various flight training schools. You're going to see a lot more focus on this kind of activity in the future.

BLITZER: Well, what do you do? Do you profile these people who come to the United States and say, "I want to learn to be a pilot," and see where they're from? How do you stop someone from learning to become a pilot?

BUIRNLEY: Well, you know, Wolf, there are gradations here. I mean, the easy case is a fellow in Minnesota who is detained who allegedly came in to a flight school and said, "I don't care about taking off and landing, I just want to know how to fly the plane when it's already in flight." That ought to set off every alarm bell.

The tougher cases are people who have, perhaps, some training that they've gotten in their home country and they come to the U.S. for more advanced training. We don't want to go to the extreme, if we don't have to, as a security of matter, of telling those people, no, you may not get training. But we do want to screen them much more aggressively than has been the case in the past.

BLITZER: But how do you avoid, Secretary Slater, profiling these individuals who want to learn how to fly? Someone comes from Saudi Arabia, from Jordan or a Middle Eastern country and says, "I want to learn how to fly a plane." What do you do?

SLATER: Well, now, this is an issue that I had to contend with as secretary. And basically, what we did was we put in place a screening mechanism, which would look at a number of characteristics not based on race and ethnicity: whether a person is buying a one-way ticket with cash; some focus on where the flight might originate and where the person might be going -- those kinds of pieces of information.

And then you pull them together, and you get some sense of the characteristics of a person who might be engaged in a certain type of activity or a series of activities that would pose some threat or raise some question. And then you stop that person and engage in more rigorous questioning.

That's the kind of program that's in place, and I think that that's the kind of program that will be enhanced as we go forward -- not profiling, but screening.

BLITZER: Secretary Buirnley, is the fact that they're going to be sky marshals aboard a lot of U.S. planes, not necessarily all of them but a lot of them, is that going to make much of a difference?

BUIRNLEY: Yes, it will. It has a deterrent impact.

BLITZER: But how does it have a deterrent impact if you don't know who the sky marshal is, if they're dressed in regular clothes?

BUIRNLEY: Well, that's precisely the point. You don't know and you don't know whether there's one on your plane.

But with each reported incident -- and obviously, you don't want any incidents -- but when one occurs, you do know when you see the sky marshals get up and grab someone, as happened with a fellow that got up to go to the rest room 30 minutes out from Washington's Reagan National in violation of the rules. And suddenly, he was down on the floor and all the passengers had to put their hands in the air.

So it's not much fun to go through that if you're on the plane, but it does send a signal that there are going to be, on many more flights than has been true in the recent past, people who can assert themselves very aggressively if the occasion arises, and that's good. I mean, I think most travelers are going to be reassured to know that.

BLITZER: Well, we're heading towards a busy travel season, although it may not be as busy as it was last year; presumably, it won't be. I want to thank both of you for joining us.

BUIRNLEY: Thank you, Wolf.

BLITZER: Thank you very much.

And just ahead, representatives from both sides of the Israeli- Palestinian conflict talk about the war on terrorism and how it's affecting efforts for peace in the Middle East.

LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

While Israeli and Palestinian leaders have expressed support for the United States in the war on terrorism, tensions between the two sides remain very high. Since September 11, there's been no let up in the violence between Israelis and Palestinians.

Joining us now from New York to talk about the prospects for Middle East peace are two guests: Alon Pinkas is Israel's consul general in New York; and Nasser Al-Kidwa is the Palestinian permanent observer to the United Nations.

Thanks to both of you for joining us.

And, Ambassador Al-Kidwa, let me begin with you and play for you an excerpt from Secretary of State Colin Powell's speech on the Middle East earlier this week, specifically his admonition to the Palestinians. Listen to this.

(BEGIN VIDEO CLIP)

COLIN POWELL, U.S. SECRETARY OF STATE: Palestinians must eliminate any doubt once for all that they accept the legitimacy of Israel as a Jewish state. They must make clear that their objective is a Palestinian state alongside Israel, not in place of Israel, and which takes full account of Israel's security needs. The Palestinian leadership must end violence, stop incitement and prepare their people for the hard compromises ahead.

(END VIDEO CLIP)

BLITZER: Do the Palestinians accept his recommendations?

NASSER AL-KIDWA, PERMANENT OBSERVER FOR PALESTINE TO U.N.: We do, and we also believe that the statement made by the secretary was a balanced one. He reiterated the vision based on two-state solution, Israel and Palestine. He spoke of many important things such as solution to Jerusalem, solution of Palestinian refugees. Reiteration for the need of ending Israeli occupation, cessation of settlement activities. All these things.

And comprehensively we do accept his statement, and I would say also that the atmosphere was very positive after the statement.

Unfortunately, the Israeli government went into a campaign of additional killing since that statement, killing actually 15 Palestinians including at least seven children, five of whom were blown up into pieces as a result of planted explosive device put by Israeli soldiers in an area which is usually used by Palestinian civilians. Two days ago the Israelis committed another extra judiciary execution, killing three Palestinians.

Thus leading to the poisoning of the atmosphere and making the mission of the two U.S. envoys much more harder than it was envisioned immediately after the statement of the secretary.

BLITZER: All right. I'm going to give Ambassador Pinkas a chance to respond to that, but I also want you to listen first, Ambassador Pinkas, to the admonition to Israel from the secretary of state, Colin Powell.

(BEGIN VIDEO CLIP)

POWELL: Israel must be willing to end its occupation consistent with the principles embodied in Security Council Resolutions 242 and 338 and accept a viable Palestinian state in which Palestinians can determine their own future on their own land and live in dignity and security.

(END VIDEO CLIP)

BLITZER: Do you accept that recommendation, Ambassador Pinkas?

AMBASSADOR ALON PINKAS, ISRAELI CONSUL GENERAL: Yes, absolutely. We've accepted that since 1967. We've accepted that in the 1970s. We've accepted that in the '80s and the '90s and, most noticeably, last year at Camp David. In fact, the solution that the secretary of state in his speech made, the solution that he proposed rather, is a solution that was on the table in 1937 with the Peel Commission; in 1947, the U.N. Partition Plan; again in the '50s; again after 1967; and of course last year at Camp David.

So from our point of view, the two-state solution is not something that is new to us, is not something that we need to debate or deliberate. It is just something that, when proposed to the Palestinians, have always found an excuse to reject rather than endorse, to ask for more things rather than accept reality as it is.

BLITZER: The secretary also said, Ambassador Pinkas, that Israel has to stop its settlement activity. And what Palestinians note is that the settlements in and of themselves create such anger within the Palestinian community that the tensions, of course, inevitably develop.

Why does Israel need to continue to, for example, maintain settlements in Gaza in the midst of all those Palestinians? PINKAS: Well, first of all, the building of new settlements and the expansion of existing settlements has been stopped as part of the government's basic guidelines when the government was formed last March.

And in terms of the settlement issue itself, that's been resolved -- that's been discussed thoroughly and resolved at Camp David to the mutual satisfaction of Israelis and Palestinians, mediated by Americans, by then-President Bill Clinton. That's...

Nevertheless, I am happy to hear an Israeli voice saying, yes, we are ready to stop settlement activities, and, yes, it was solved, although it was not.

But if he is ready to accept complete cessation of settlement activities as a first step to removing those settlements, unless there is a mutual agreement on any adjustment of borders, that's great, and let's go for that.

BLITZER: Ambassador Pinkas, you heard Ambassador Al-Kidwa say that Israel deliberately killed those five Palestinian boys in Gaza the other day by leaving a bomb there, in effect, that would kill these youngsters. Is that true?

PINKAS: No, absolutely not. And we have apologized for this awful tragedy.

What seems to have happened -- and I qualify what I say by saying "what seems to have happened," because we are investigating this tragedy -- is that the idea of the Israeli defense forces was, after a group of Palestinians who have been repeatedly shooting mortar bombs from within Palestinian-controlled areas into Israel proper. And in that area, apparently a side bomb has been planted that was not supposed to have been there, that was not supposed to have been detonated, but it did happen.

And we have profusely apologized for it, and I am apologizing for it right now.

It's an awful tragedy, but you have to remember the context. The context is that, from that area, from the immediate vicinity of Palestinian schools and where Palestinian children go to school, en route to their schools and kindergartens Palestinians stand and shoot mortar bombs at Israeli civilian towns, and that has to stop.

BLITZER: All right. PINKAS: And in trying to stop that, this awful mistake has happened, and we apologize for it. And we will investigate it thoroughly.

BLITZER: Ambassador Al-Kidwa, let's move on and talk about the new U.S. mediatory effort. Secretary Powell announcing two special envoys will be traveling to the region, former Marine Corps General Anthony Zinni and Assistant Secretary of State William Burns.

But he does say in a new issue of Newsweek magazine that's just out today, Secretary Powell told Newsweek magazine this, and I'll put it up on our screen: "I am sure the Palestinians would like to start again at that deal," referring to the Camp David agreement that President Clinton tried to get off the ground -- "and try to go further. But that deal went off the table when President Clinton left office."

Is that acceptable to the Palestinian side, that the concessions which Israel offered at Camp David are no longer applicable?

AL-KIDWA: Well, the important thing here is what the secretary has reiterated, namely that the Security Council Resolutions 242 and 338 remain the basis for any settlement, for any final settlement to be reached by the two sides. And this is exactly our position.

By virtue of these two resolutions, Israel has to end its occupation and withdraw its forces and its settlements from the territory it occupied in 1967. We remain committed to this solution.

What happened in Camp David and later on through the initiative made by President Clinton, and later on through the negotiations between the two sides in Taba (ph), there was some progress made towards reaching agreement on the implementation of 242.

If these are taken into consideration, it will facilitate the work of the two sides. If not, we again remain committed to 242, and this is the only acceptable basis for the settlement between the two sides.

BLITZER: Ambassador Pinkas, are you convinced that your prime minister, Ariel Sharon, is prepared to make the kind of concessions in this new round of negotiations that the Bush administration would like to see and, certainly, the Palestinians would like to see?

PINKAS: Well, I'm confident that he's intent on pursuing a peace process, and I'm confident that he will make the necessary compromises and concessions, as he himself admitted on many occasions.

What I'm not confident is that he will find a credible partner on the other side. And while I really don't want to degenerate this into a blaming game -- you know, there's a wonderful book by Fuad Ajami (ph) called "The Dream Palace of the Arabs."

And it's about time, Ambassador Al-Kidwa, that you get out of this dream palace, that you become realistic, you become responsible, you express statesmanship and be accountable to your own actions. Enough is enough with blaming Israel, blaming America, blaming the entire world for that matter, on all your self-inflicted political mistakes.

Stand up, make a decision, stop being indecisive. It's costing you, it's costing us. It's getting on the world's nerves. Make a decision.

AL-KIDWA: Can I say something here?

Actually, you hear nice words which are not reflective of the official Israeli position, because the prime minister went publicly, repeatedly, and said, "I don't want a final settlement, I want only a partial agreement on non-belligerency." He said that repeatedly.

He said also that he doesn't accept any cessation of settlement activities. He said that he would continue with extrajudiciary killings, he said that he will continue with all measures taken by the Israeli army against the Palestinian people.

And now we are being lectured by a nice guy who speaks perfect English.

But this is not the issue. The issue is the need for two sides to comply with the agreed basis of the final settlement; implemented 242; establish a Palestinian state in the territory which was occupied by Israel in 1967, with Jerusalem as its capital; find a reasonable and just solution for the problem of Palestinian refugees. And I assure you that we are ready to proceed in a fantastic relationship with our neighbors, the Israelis.

BLITZER: All right, on that optimistic note, I'm going to have to leave it. Unfortunately, we are all out of time.

Ambassador Pinkas, Ambassador Al-Kidwa, thanks for joining us. And we hope to have you back, both of you, soon. We appreciate it.

AL-KIDWA: Thank you.

BLITZER: Thank you.

And when we return, since September 11, millions of people in America have sought comfort in their religious faiths. How could religion and spirituality sustain the American spirit during a time of war? We'll get perspective from three religious leaders when LATE EDITION continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I appreciate your support of our objectives in the campaign terrorism. Tonight that campaign continues in Afghanistan so that the people of Afghanistan will soon know peace. The terrorists have no home in any faith. Evil has no holy days.

(END VIDEO CLIP) BLITZER: Welcome back to LATE EDITION.

President Bush speaking to Muslim leaders this past week at a White House dinner in observance of the Muslim holy month of Ramadan.

Joining us now from New York to discuss spirituality during this time of war: Rabbi Marc Gellman of Temple Beth Torah on Long Island, Monsignor Tom Hartman of the Diocese of Rockville Center, also on Long Island. They're affectionately known as The God Squad. And in Los Angeles, Imam Muzammil Siddiqi, he's the president of the Islamic Society of North America.

Let me ask you, first of all, Monsignor Hartman, is there a renewed spirituality that you sense developing in the United States in the aftermath of September 11?

MONSIGNOR TOM HARTMAN, ROCKVILLE CENTER DIOCESE: Well, more people are coming to church. More people are asking questions about good and evil. They're questioning their lifestyle, trying to make it more simplified. And they recognize that, as adults, we have to give hope to children who are afraid. And in the midst of that, that hope comes from prayer, it comes from a belief that we're not alone, that God is with us in the midst of this struggle.

BLITZER: Imam Siddiqi, do you sense that there is greater spirituality among Muslims that you're involved with?

SIDDIQI: Very much, especially now we are in month of Ramadan. Always in the month of Ramadan, people become much more religious, observance of religion increases.

But now, especially at this time, after the tragedy of September 11, there is much more turning to God, more observance of religion and understanding.

Of course, what happened, I must emphasize, was not religious thing. It had nothing to do with religion. But some people misuse the name of religion, so that's why there is a great understanding in trying see that we understand our own religion and also introduce the basic principles and values of Islam to other people.

BLITZER: And then, Imam Siddiqi, just to be precise on this matter, there's no doubt that you and your supporters, your followers, completely condemn Osama bin Laden and the form of Islam that he practices?

SIDDIQI: We, of course, we condemn fully the terrorism, the tragedy, that criminal act that took place on September 11 in New York and Washington. All of this is was unanimously condemned by all Muslims.

BLITZER: Rabbi Gellman, are members of your congregation becoming more or less observant or religious, if you will, in aftermath of the terrorist attacks?

RABBI MARC GELLMAN, TEMPLE BETH TORAH: It's an overwhelming response, I think, Wolf, to the sense of inner chaos and panic that occurs, particularly here on the East Coast, and then, particularly, in the New York area. I think it's, of course, not quite as severe in communities that have not been as deeply affected, but here it's enormous.

And, you know, particularly, in communities that aren't normally active in religious life, in the 20-somethings, in kids, many of whom lost their dear friends in this catastrophe. And we did memorial services right after the event for several of these young people, and it was really heartbreaking to see kids in their 20s who have no natural way of relating to death -- that's something that has to do with grandma and grandpa -- to see them turning to religion, as a source of their hope. It's both terrifying but also inspiring.

BLITZER: Monsignor Hartman, during this period of Thanksgiving here in the United States, we just celebrated the Thanksgiving holiday, some Americans find there's a lot less to be thankful right now, if they're losing their jobs, they're worried about their security, there's an anthrax scare out there. What do you say to these people?

HARTMAN: Well, it's a bittersweet time if you've lost somebody through death or if your family is frightened or you've lost a job or your income has gone down because of the stock market or whatever. It's a time of sadness and grieving and recollecting yourself and trying to keep a center.

On the other instance, the sweet part of it is that we really believe that, in order to jump-start ourselves again, to get back in the arena, that we need to be thankful -- thankful for little things, thankful for family we have, thankful for the faith that's there, the friends that we have, the acts of love that are in our lives.

And we like to encourage people to go back to the basics and recognize that God is always there to answer our prayers and to hear our prayers.

BLITZER: Imam Siddiqi, how worried are you and members of your of your mosques about these latest efforts on the part of U.S. law enforcement authorities to question Muslims out there, Arab-Americans, visitors to this country, the whole notion profiling of Muslims or Arabs in the United States?

SIDDIQI: Well, I understand the concern for the security, and this is our concern and we would very much like to see that our country be safe, and we cooperate fully in that matter.

But at the same time, singling out any group of people, any race, any religion, this is not an American way, and I hope for people will not (UNINTELLIGIBLE) this thing and try to treat as the people.

Muslims in America, 6 or 7 million Muslims in America, they're law-abiding people. They love this country, and they are like any other Americans. We share the same values, we share the law of the country, and would like that we should be treated with respect and honor. I much appreciate that.

Many of our neighbors, they understand that. Our Jewish friends, our Christian friends, many of them are supporting us, and there is a great understanding among the people. Whenever we have open house, thousands of people coming in different Islamic centers and communities.

We would like to have this dialogue, the understanding among the people of faith -- among all people.

And I see that, that there is a greater opening now for people to understand. The sales of the Koran have increased. Many people are reading the Koran, American people. Many people reading Islamic books. They are contacting us and asking us to explain our religion.

So we like to see that people have better understanding. We would like to see that Islam understood as part of the country. And this is what we're all about.

BLITZER: All right, Imam, Rabbi and Monsignor, stand by. We have to take a quick break.

When we return, we'll be taking your phone calls for our panel of religious leaders. LATE EDITION will be right back.

And, Monsignor Hartman, what do you say to Catholics out there right now who are angry at Muslims in general for what happened on September 11?

HARTMAN: Well, the first thing in I say to them is that Muslims are law-abiding citizens. They pray five times a day. They give to charity. They go to the mosque as we go to the church.

And the Muslim faith, as such, does not teach the value of killing another person. It says if you kill one person, you kill everybody. And it not for suicide. If you take your life, it doesn't belong to you, it belongs to God.

What we see is a perversion of religion. And right now the challenge that the Muslim faith has is to stand up and say, as the Imam has said, "We are not behind this terroristic activity. We don't support it. And we will be with those who are trying to rout it out of our society.

BLITZER: As far as you know, Rabbi Gellman, is there any serious dialogue under way between the American Jewish community and American Muslims to try to overcome some of the differences that have developed over the years?

GELLMAN: Well, there are places where dialogue occurs, and those are wonderful and glorious examples.

I think what Tommy and I experienced, now almost 15 years ago, when we met, is that the progress in inter-faith dialogue does not come when one institution calls up another institution. It happens when one human being finds a friend in another human being who is from a different faith or a different culture.

And that is the kind of transformation that we pray for, that there should be millions and millions of "God Squads" and people should find each other before these events so that they have Muslim friends already, and they can call them up and say, "Is there something I can do for you, and are you in danger? And is there a way for us to find each other?" That's the future, is in individual friendships mushrooming across the country.

But in this era of fear and panic when it is clear to everyone with a mind that not all Muslims are terrorists, but in fact all the terrorists are Muslims, that there is an anger that has to be quelled. And unfortunately, it cannot be quelled and it cannot be reduced by rabbis or priests telling their community, "This is not what Islam teaches." We do that, but it isn't enough and it isn't effective. It has to come from the Muslim community itself.

Islam must spit these people out. Islam must condemn them in massive acts of demonstration that make it clear to everyone. And that is the way that things have to change.

BLITZER: What about that, Imam Siddiqi, what do you say to what Rabbi Gellman just said?

SIDDIQI: Well, I agree with that, that this is not Islam. But at the same time, I must say that not all terrorists are Muslims. This is not right to say that, that all terrorists are Muslims. Terrorists exist in all religions and all cultures and all nationalities.

So there are some, very unfortunate to have. But no true Muslim could be a terrorist; no terrorist could be a true Muslim. Those who are doing this kind of acts they are against the teachings of their -- of Islam, against the teachings of their religion.

We would like to have good relations. We would like to have dialogue, with understanding, tolerance, living in the pluralistic society. Actually the whole world is becoming pluralistic. We are living in the global village. And we appreciate very much the good relations with our Jewish community, with our Christian community, Catholic community.

Here in Los Angeles, we have an Academy for Christian and Islamic Studies, and we do dialogue with our Jewish friends, Christian friends. And we like to promote that. Actually we worked on a book called "Abrahamic Connections." There are so many things in common in our traditions, and we would like to emphasize the commonalities. We believe in the same God. Unlike what Franklin Graham said, we believe in the same God. And our religion is not religion of evil or the religion of wickedness, as Mr. Graham said. And I'm glad that many Christian ministers, they came out and they spoke against that.

So it is important that the religion should not be demonized. People should understand the religion. And our books are open. We are open to anybody who would to visit our Islamic centers, we welcome them.

BLITZER: Imam, I want to thank you very much, Iman Siddiqi, Monsignor Hartman, Rabbi Gellman, all three of you, for joining us on this Thanksgiving weekend here in the United States.

And just ahead, with the U.S. military campaign in Afghanistan appearing to be successful, at least so far, what should the Bush administration's next steps be in the war against terrorism?

Time now for our LATE EDITION roundtable. Joining me: Susan Page, Washington bureau chief for USA Today; Steve Roberts, contributing editor for U.S. News and World Report; and Rich Lowry, the editor of the National Review.

Thanks to all of you for joining us.

And what about Colin Powell's speech on the Middle East? Some suggest that it was done at this time in order to, in effect, reassure Arabs and Muslims that the U.S. is not going to abandon the Israeli- Palestinian conflict.

STEVE ROBERTS, "U.S. NEWS AND WORLD REPORT": Well, I think it's important that he do that. I do think that there is a lot of concern in the world that the Bush administration, even before September 11, was not going to get involved there. You know, during the campaign, Bush criticized Clinton for getting so involved.

But the fact is, he had to get involved, he was always going to get involved. American national interests are far too involved in that part of the world for any U.S. president, George Bush or anybody else, to stay out.

I thought the speech was very strong. And I think it was important that he used the word "Palestine," that he say the ultimate aim here has to be two states, side by side. Everybody knows that. No one will say it publicly in the Middle East. He told the truth.

He also told the truth in telling the Arabs they have to protect Israel, they have to protect it from terrorism.

It was a good, strong speech, saying what everybody knows to be true.

BLITZER: You know, some supporters of Israel have criticized the timing of the speech -- not necessarily the substance, the timing -- as in effect rewarding terrorism.

RICH LOWRY, "NATIONAL REVIEW": I think there's something to that. It does show there is some benefit to terrorism. The September 11 attacks clearly pushed the administration into doing this now.

I think we should just admit the peace process is a menace. And it's because there is always an implied moral equivalence between Israel, which is fighting terrorism, and Yasser Arafat, who, at least indirectly, is sponsoring terrorism. I don't think there's any comparison between the two, and I don't think Yasser Arafat is a decent partner for peace.

BLITZER: In the issue of the Weekly Standard that's just out, Robert Kagan and William Kristol, the editor, writes this: "The secretary of state seems bent on repeating his recent errors, this time in the Middle East. At a time when the United States should be exploiting its victory and pressing hard, both in Afghanistan and against other terrorist threats, Powell has decided the time is right to appease the Arab world by leaning on Israel, snatching defeat out of the jaws of victory."

SUSAN PAGE, "USA TODAY": Well, the Weekly Standard has always been tough on Colin Powell, and at the moment they're just about the only people who are not full of praise for the secretary of state.

I mean, the fact is, if the goal is to move against Iraq -- and that is one of the goals, I think, of many of the editors of the Weekly Standard -- you're going to need a coalition that includes some Arab partners to do that.

And, if you've got a situation in the Middle East where you're playing no role and you're not reassured that you're going to address some of their issues there, how are you going to hold a coalition together to do anything about Saddam Hussein?

BLITZER: Is the National Review supportive of Colin Powell on this?

LOWRY: No. He has been wrong every step of this war. It was Colin Powell who was supporting the southern strategy, which is that you blow up some empty buildings, and that will prompt -- push Pashtun defections in south. That was a failure. It was B-52 raids in the north that actually killed people that worked.

And it was Colin Powell supporting the idea of Northern Alliance stopping outside of Kabul, and that was an unworkable and ridiculous idea as well.

So he should be totally discredited, I think, at this point. ROBERTS: Oh, please.

(LAUGHTER)

LOWRY: But he has a major constituency in the media.

ROBERTS: Come on. Totally discredited? You have the Taliban in a rout. You have defections of -- coming across the line.

There's a lot of work to be done, in terms of stabilizing this country. We cannot underestimate how difficult the politics are. But from a military point of view -- two weeks ago we were sitting here and saying, oh, the Taliban is so tenacious, we're never going to overthrow them.

LOWRY: Right.

ROBERTS: Come on!

LOWRY: Well, Steve, what happened two weeks ago?

ROBERTS: Give him some credit.

LOWRY: What happened two weeks ago? Rumsfeld won the argument over Powell. We threw in with the Northern Alliance and started actually killing Taliban troops in the north, and that's what created this awesome breakthrough. And that's exactly the strategy that Colin Powell didn't want to adopt because he was so afraid of the Pakistani reaction.

PAGE: Well, it's certainly true that you have a push and pull between the diplomats and the warriors in the Bush administration.

And you're going to see this get fiercer now, because, as the war in Afghanistan is won -- and it seems on the verge of being won -- then you have some big issues ahead: Do you try to go after Iraq? What do you do about the Philippines? What other nations do you go after in a tough way? And how do you go about doing that?

And those are questions this administration hasn't yet answered. It's on the verge of being forced to answer them.

BLITZER: Although we did get a pretty strong signal from President Bush in the new Newsweek interview -- and we ran that excerpt earlier in the program -- in which he basically, in effect, laid out an ultimatum to Saddam Hussein in Iraq: Either comply with the U.N. weapons inspection regime -- that hasn't been complied with in, what, three years -- or you may pay the consequences.

ROBERTS: Well, one of the reasons why he was saying that is to appease, as people like Rich...

(LAUGHTER)

And there's a constituency for saying, OK, we made a mistake when we didn't go after Saddam 10 years ago and we have to get him now. I think that is an enormous decision.

Among the other things, Susan's right, we need a lot of Arab partners to do that. We cannot do that by ourselves. That's one of the reasons why we didn't go in 10 years ago, because our coalition could not hold together, and we were very uncertain about what would happen to Iraq after the removal of Saddam Hussein which would -- the country could totally collapse into warring factions in the way Afghanistan can. We have to be very careful with this one.

BLITZER: All right, let's take a break. We'll move on to some other subjects when we come back.

More of our roundtable in just a moment. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our roundtable.

Susan, how much dissension within the top elements, top members of the Bush administration is there when it comes to conducting the war against terrorism?

PAGE: Well, I think when you're talking about conducting the war against Afghanistan, very little. I think there's a unanimity in purpose. There's a desire to get Osama bin Laden. I don't think there's been a lot of division there.

But I do think the task everywhere gets harder as you start to succeed in this first stage and think about what you do in the next stage. And the president has, in fact, intentionally put off some of these decisions because the divisions are so deep.

You know, Colin Powell would probably start with, what kind of coalition can we form and what can we do with that? Donald Rumsfeld would start out with, what do we want to do, and, by the way, does anyone want to go along and do it with us? Very different approaches to the task going that's going to come up next.

BLITZER: You know, I was in Europe this past week; I was in England. And I was surprised by the -- you know, here in the United States, it's very clear-cut, the support for the war against terrorism. But even in Britain, which is America's number-one ally, by all accounts, you hear a lot more criticism of what the U.S. is doing over there than you certainly hear here. And that's mild compared to the rest of Europe.

LOWRY: Yes. I mean, that's true, and I don't know what to do about it.

I take some comfort in the fact I don't think European public opinion, operationally, is that important. And what we saw in Afghanistan is, even while European public opinion went south, at least somewhat, our coalition shored up in the immediate region where it was important -- Tajikistan and Pakistan.

And, you know, the biggest factor that will get people on our side is winning and success. And we've seen bin Laden's prestige plummet in the Arab world.

We saw -- you know, two theories about this war. One is that, if you went in and toppled the Taliban and bombed the heck out of Afghanistan, the Arab street would rise up as one against the United States. The other theory is no -- went in there and demonstrated American power, the rest of the world will be more willing to go along. And that second theory, I think, has been proven correct, just clearly.

ROBERTS: Of course, Europe didn't have more than 4,000 people killed on their soil. And we have been so soaked, as a country, in these images and this experience and so scarred by it, that we're far more willing to accept some of the downside consequences, some of the civilian injuries. This is a calculation this country is willing to make.

Europe, far less directly emotionally involved, I think, makes a somewhat different calculation about the costs of this war, which are -- continue to be significant.

BLITZER: And one of the costs is that the tours of the White House that have been open to the public -- I was a White House correspondent and used to see those people lining up for blocks and blocks and blocks -- they're going away. The president described earlier in the week why he had to cancel those White House tours.

(BEGIN VIDEO CLIP)

BUSH: Laura and I regret that the public tours aren't going on. It's -- particularly during the Christmas holiday season, I know a lot of Americans look forward to touring the White House during this period of time, but we're in extraordinary times. And as I said yesterday, evil knows no holiday; evil knows no -- it doesn't welcome Thanksgiving or Christmas season. And in these extraordinary times, we're taking extraordinary measures.

(END VIDEO CLIP)

BLITZER: Well, what kind of signal does that send to the American public, though?

PAGE: You know, what a mixed signal. I mean, on the one hand, we saw public service ads come out this week with President Bush urging to us all to travel and do all the things we would ordinarily do in this Christmas season. And then the White House closes down these tours, which are just ordinary folks who come by and see the wonderful Christmas decorations in the White House.

You know, you don't just walk in the White House when go on one of these tours. You go through a visitors' center, you get searched, you go through a magnetometer. The security is pretty tight.

And I think it is unfortunate that the White House chose to do this. I think it's not the right thing to do, especially at a time when all of us are being urged to go out and shop and travel. LOWRY: Maybe there's some credible immediate threat that's causing this. But the problem is the Secret Service, once something is closed off, it kind of has a Brezhnev doctrine of its own. It doesn't give it back and it doesn't open it up again. And it would be a real shame if this was just the new world we're dealing with, but it seems like it may be.

ROBERTS: And they're doing the same thing in the Capitol, where they're restricting public access. They closed off Pennsylvania Avenue several years ago. I think these are all terrible ideas.

They do send, not only a mixed signal in terms of economic activity and back to normalcy, they send as a psychological sense that America is under siege and frightened. I think it is counterproductive. I think we should let the people back in the White House, open up Pennsylvania Avenue, don't let the Secret Service run things.

BLITZER: Easy for you say, Steve.

(LAUGHTER)

Harder for people who are protecting the president and his advisers.

I want to thank all of you for joining us on this Thanksgiving weekend.

LOWRY: Thanks, Wolf.

BLITZER: Thank you.

And coming up next, the third hour of LATE EDITION. We'll take your phone calls for our military experts. Plus, a look at the refugee situation inside Afghanistan and what the international community is doing to help. LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: This is the third hour of LATE EDITION: "Target: Terrorism."

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: It has been said correctly that it's like finding a needle in a hay stack, but we're looking.

(END VIDEO CLIP)

BLITZER: A $25 million bounty is offered for Osama bin Laden even as the Taliban surrenders more territory in Afghanistan.

We'll take your questions and phone calls for our panel of military analysts: Former Supreme Allied Commander General Wesley Clark; retired U.S. Air Force Major General Don Shepperd; and security specialist Kelly McCann.

Plus, your phone calls and questions for relief workers helping people in Afghanistan. And Bruce Morton has the "Last Word" on another important coalition objective.

Welcome back.

This hour of LATE EDITION belongs to you. We'll be taking your questions about military operations and the search for Osama bin Laden. We'll also focus on Afghanistan's refugees and what's being done to help them. But first, once again here's CNN's Donna Kelley in Atlanta for a quick check of the hour's top stories.

(NEWSBREAK)

BLITZER: And joining us now to talk about the U.S. military campaign in Afghanistan as well as the search for Osama bin Laden, are three guests: in Little Rock, Arkansas, General Wesley Clark, a CNN military analyst, former supreme allied commander of NATO. Here in Washington, CNN military analyst, retired U.S. Air Force Major General Don Shepperd. And former special missions officer J. Kelly McCann. He's now president, CEO of Crucible Security.

Gentlemen, thanks for joining us on LATE EDITION.

General Clark, let me begin with you. Briefly give us your overview where the military campaign in Afghanistan stands right now.

GEN. WESLEY CLARK (RET.), CNN MILITARY ANALYST: I think their campaign is moving forward. I think the take down of Konduz is under way. I think that's a significant success. There's still some fighting there. A lot of the first reports will prove to be wrong, but I'm sure that we're going to find that it's taken a tragic toll on civilians as well in that area. But it will count as a success.

The real questions are around Kandahar where Mullah Omar is still with his forces. The question is who's going to move against him. How soon and with what. And also other pockets including pockets around Jalalabad where we've had some reports that Osama bin Laden may be hiding in a prepared mountain fortress. What will done and when, those are questions facing the administration.

BLITZER: And General Shepperd, what was underscored today by this report which has not been confirmed, perhaps the first U.S. combat casualty in Afghanistan. Is that -- it's still a very dangerous for U.S. military personnel.

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: Yes, war is a dangerous thing at all times, Wolf, and just when you think you've got it under control and it's time to relax, something pops up that surprises you. This was a surprise at Mazar-e Sharif.

Now the other rule of thumb for military operations is the first reports are always wrong so there's lots to be sorted out here but it is dangerous, it's dangerous for the military on both sides. It's dangerous for correspondents as we've seen. BLITZER: All right let's take a quick caller from Massachusetts. Go ahead with your question.

CALLER: Hi. I would like to know how bin Laden can be traveling at night with 2,000 armed soldiers all around him and the CIA planes and everybody, nobody can notice him moving with this large army of his?

BLITZER: All right, Kelly, you're a former special operations officer.

KELLY MCCANN, CEO, CRUCIBLE SECURITY: That's a good question. Doubtlessly, he's not moving with 2,000 people around him because that's too much of a signature. There's a comment signature and a signet signature and all of that.

So if he's not fixed in place, which we have every reason to believe that he is in a small area, he's likely not traveling with an entourage that big. He may have some of force 55 (ph) around him, but undoubtedly, he's not moving with that big of a group, if at all.

BLITZER: And General Clark, we have a map of where he supposedly was spotted around a place Tora Bora near Jalalabad in the northeastern corner of Afghanistan.

If he's hiding in one of those caves up there, deep in side one of those mountains, how difficult will it be for the U.S. to find him?

CLARK: Well, it is going to be difficult. We will be wanting to check each one of these reports. We will want to see if there is any signature coming from the area. We will want to make sure we know where the entrances and exists are, because all of these complexes are likely to have more than one entrance. And we want to block that off, and then we will work at our leisure at how to actually get inside, check what's in there, or just destroy it and seal it up.

BLITZER: But General Shepperd, the U.S. does have some pretty sophisticated equipment that can find heated areas in those mountains, in those caves, specially as the winter months approach.

SHEPPERD: We've got all kinds of sensors and they start with people on the ground, and they go all the way up to outer space. The sensors are very sophisticated. On the other hand, you have got to have fusion of all of this intelligence. And what you want to know is not what's moving, you want to know where is he right now as of a minute. And then you want to get together a plan, a good plan, with significant and overwhelming force.

You don't want to send a team of special forces, 12 guys into a cave to see if bin Laden is in there. It's going to be very complicated and sophisticated when we find him, but we're searching in a smaller and smaller area with more and more people.

BLITZER: But Kelly, you have heard the complaints, you have read the articles about some special operations forces complaining that they seem to have good information, but then when they run it up the chain of command and the lawyers start looking at it and reviewing it, by the time they get the authority to take action, it's too late.

MCCANN: That's why I would not rule out what Haron Amin has said, which is they may be the ones that go in the caves.

BLITZER: Haron Amin being the representative of the Northern Alliance.

MCCANN: The Northern Alliance, exactly. He was very clear on your show to talk about that they were very well -- aggressive enough to go in there and do it themselves, and that gives us a little bit more latitude than if we are totally responsible for it. So I wouldn't rule that out.

BLITZER: Is that something the military would welcome you think, General Clark, not necessarily letting the U.S. take out Osama bin Laden, but letting the allies, in this particular case, the Northern Alliance rebels do the job?

CLARK: Well, I think that's the preferable way to do it, but there has to be an understanding that when they get him he's not going to be given amnesty.

CLARK: I don't know, but I do know that there have to be some understandings. And they're probably already in place about what can and can't be done once these people are taken.

It's very important to the United States that the al Qaeda network, including Osama bin Laden, be completely taken down, not put in a never never land and discussed for months on end.

BLITZER: General Clark, are you all concerned that some of these Taliban troops that are giving up, that are defecting if you will, are just surrendering, are being allowed to go free, as opposed to being detained?

CLARK: I think we've got a number of U.S. assets in the area, and so I suspect that we've got some say as to who goes where. And if these are Taliban troops that are simply defecting, changing sides, they were never that committed anyway, but simply fighting with the Taliban, that's one thing. If they're al Qaeda, that's something else.

BLITZER: General Shepperd, should there be different standards for the foreign members of the Taliban, the Pakistanis, the Arabs, the Chechens, the Chinese as opposed to the native Afghans themselves?

SHEPPERD: Well, as we sort this out, of course it's up to the Northern Alliance and the opposition forces. This is not our call. We're not in charge of this war. They are. And they're clearly going to be different standards.

Right now what's emerging is the local Taliban, if you will from the local area, are allowed amnesty, allowed to go back home, allowed after they're disarmed, maybe even allowed to change sides. But clearly you do not want the people from these foreign nations to change sides or to go back to their countries and be able to fight us another day.

So if that's a different standard, yes, and it's an appropriate different standard. We don't want these people dead. We want them alive. We want the information. Where is al Qaeda, where is bin Laden, where are the other al Qaeda cells? That's what we want from them.

BLITZER: Let's take another caller from Mississippi. Go ahead with your question, please.

CALLER: I would like to know exactly what is it that we think we're going to win at any point if the Northern Alliance is going to let the Taliban leaders go home and go about their daily lives and back in their own homes, and everything. What have we accomplished here?

BLITZER: Kelly McCann?

MCCANN: That's a good question. Remember, there's two types of Taliban here. There's the Arab-Afghan Taliban, and then there's also the Afghani Taliban themselves. So, the Afghani Taliban, I think, were pressed into service by the Arab Afghanis, and they are not as much of a risk as Arab Afghanis. Those are your problem.

Now, the other question is, of course, what do you do with 3,000, 4,000 Arab Afghani detainees. When you have a detention camp and the types of things that people can get into there, through conversation and planning, et cetera, it becomes a problem.

But the end game is splitting the Afghani Taliban and the Arab- Afghani Taliban.

BLITZER: General Clark, if the U.S. starts arresting, if you will, or taking these POWs, if they're going to be called "POWs," prisoners and moving them to various U.S. bases around the world -- there's been some suggestion of Guam, for example, could be used in the middle of the Pacific, out there, or Samoa, other places, is that something the U.S. military should be doing?

CLARK: Well, it's something that could be done. It really is up to the president. He's declared he could use military tribunals.

There hasn't been a recourse to the United Nations on this yet. And so, it would look like they would be tried under U.S. law at some facility, probably by the military in one of these tribunals. And so, yes, the military would in that case move them.

BLITZER: Is that realistic, General Shepperd, to move them out to, for example, Guam? You know, there's an airbase out there.

SHEPPERD: Good place on Guam, a long swim to anywhere you could do any kind of damage from there. Not unheard of at all. There is many places we could intern these prisoners, and be helpful. But this evidently is going to be done with UN auspices. So, they'll decide where they go, and we've got some places to put them.

BLITZER: All right.

Let's take another caller from Wisconsin. Go ahead please with your question.

CALLER: Yes, I've got a question. Well, maybe I should back up just a little bit.

Kelly, you're one hell of a guy, OK?

Number two, I guess, how do we actually know that bin Laden is in Afghanistan? I mean, if I was a rabbit in my backyard and somebody starting shooting at me, I'd be long gone.

BLITZER: Well, that's a good question.

MCCANN: That is a good question, and thanks for that comment too.

The thing is, we've got such an all-source fusion, as the general talked about, effort in intelligence, with overhead imagery, with communications intelligence, signals intelligence, and human intelligence now on the ground, we have every reason to believe that he is still there.

I think that there are significant operations under way in other places in the world that we would be on that end to catch him, if he moves that way.

So we've got a much better network to find now than we did going into this thing.

BLITZER: General Clark, on this program earlier Senators Lugar and Durbin, both members of the Senate Select Committee on Intelligence, said they're pretty pleased with the level of intelligence that the U.S. was having right now, especially the cooperation from other international intelligence services out there, friendly ones and some not so friendly, the information that they're sharing with the United States.

CLARK: Well, this has been the key in this campaign, as we've said from the beginning. It was really not going to be just a military campaign, it required law enforcement, it required intelligence, and especially intelligence cooperation from other nations. And I think that really validates the coalition strategy of the administration.

This is an operation and a war that really can't be won by one nation. It has to be won by all nations pooling their assets and pooling their information together, and that's what's happening.

BLITZER: But, General Shepperd, at the same time the U.S., at least in the early weeks of the campaign, made it clear it wasn't anxious for direct military assistance, except some sort of symbolic assistance from Britain. But it really wanted to do it alone. SHEPPERD: We've got to have a coalition no matter where we go, in this modern day and age. Because the important thing is not necessarily the coalition in Afghanistan, but it's the coalition in the other areas that we're going to after this, Wolf. Coalitions are absolutely necessary.

And right now all the help we can get from nations such as Japan, that's sending extra ships. All of this stuff takes the load off our back and our thinly stretched military, as we expand our efforts in other areas.

BLITZER: All right. Gentlemen, we're going to take a quick break.

We have a lot more to talk about, including many more of your phone calls, and your questions. LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I believe good triumphs over evil, and I believe in the fearless hearts of the United States military.

(END VIDEO CLIP)

BLITZER: President Bush expressing thanks to the troops at Fort Campbell, Kentucky, this past week.

Welcome back to LATE EDITION.

We're continuing our conversation and taking your phone calls for CNN military analysts General Wesley Clark and Major General Don Shepperd and former special missions officer Kelly McCann.

General Clark, James Woolsey, the former CIA director, was on ABC earlier today speaking about the need to follow up the conflict in Afghanistan by taking on Saddam Hussein once again. I want you to listen to what Mr. Woolsey had to say.

(BEGIN VIDEO CLIP)

JAMES WOOLSEY, FORMER DIRECTOR OF THE CIA: We don't start with the international community and take a vote and work backward to our policies. We find the people who have come after us and Saddam has come after us on more than one occasion and we cure the problem, and I think the time is right now after we win in Afghanistan to begin to move against Iraq.

(END VIDEO CLIP)

BLITZER: What is -- what does that mean militarily speaking to move against Iraq?

CLARK: Well, I think what we're going to see here is increasing a deployment of forces into the region to be able to put greater pressure both from the north and the south on Saddam Hussein. And that should be then accompanied by legal and diplomatic measures to put pressure on it. Economic measures and then we'll see what happens, but he does have an active program to gain weapons of mass destruction. He has threatened the United States before. He's tried to assassinate the former President Bush and so he's an enemy and he should be on notice.

BLITZER: Let's take another caller from Kentucky. Go ahead with your question please.

QUESTION: Good afternoon, gentlemen. Gentlemen, Iran is one of the most powerful countries in that region. What is the role of Iran in today and tomorrow of that region's future?

BLITZER: All right, the question's on Iran, General Shepperd. What is the role of Iran in this conflict right now?

SHEPPERD: Well, Iran is clearly one of the most powerful and important countries in that area. We are focusing right now rather than military action, we're focusing our diplomatic action on Iran to improve the relationship to that country. It's enormously important.

They still have the radical Islamic regime in there, but we're trying to basically work with that regime and also get next to the people of Iran, who, despite Desert One, do not hate us. I see a very hopeful relationship, long term relationship developing with Iran. It will take a lot of pressure off other people in the area if we can do that.

BLITZER: Kelly McCann, this past week for the first time, we began to see a lot of -- not just one or two but a lot of pictures, videotape, still photographs of U.S. special operations forces inside Afghanistan working with the Northern Alliance, working with other groups. They're dressed almost in -- not in camouflage, but they're almost dressed like locals out there.

What goes through your mind when you see them -- when you see these pictures, as I'm sure you've seen this past week?

MCCANN: They're loving life. I mean, for once they're doing what unconventional soldiers are supposed to do. I know that those soldiers are professionals, they live for this. And here's a chance for them to actually employ all the skills that they're supposed to be able to. Liaise with the CIA as they're supposed to. Use communications capabilities that sometimes they don't get a change to, so I'm sure that this is going to be the high point of many of their military careers and they're actually enjoying it.

CALLER: Yes, my question is, of the Taliban soldiers that have been captured or surrendered, are any of them being used and have they given us any pertinent information that can help us find Osama bin Laden and other Taliban leaders?

BLITZER: General Clark?

CLARK: Well, of course there's going to be an effort made to get information from them. What precisely they've told us we don't have access to right now, but you can be sure that they are being screened when they turn themselves in. Someone's talking to them. They're in priority order depending on who -- where they've served and how high ranking they are and every effort will be made to get information from them that will lead us to Osama bin Laden.

BLITZER: And General Shepperd, you never know in your line of work in the military where that next useful tidbit of information is coming to come from.

SHEPPERD: You want information from everybody you can get your hands on. Again, all of our censors and then the human intells. The human intelligence being the most important, but you got to sort it just like everything else.

One of our problems with intelligence and the censors is information overload. You then has to synthesize that and focus it so you can get the real information, the real intelligence to decide to put together a military plan to go get it an objective or him, in this case bin Laden.

BLITZER: General Clark, put on your overall political strategic hat for a minute when you were the NATO commander.

This coming week there are going to be talks in Bonn, Germany, for a new political post-Taliban regime in Afghanistan, but the fundamental fact of life is that the Northern Alliance right now seems to have the facts on the ground in its favor. They're in control of Kabul, the capital, about 80 percent of the country right now.

Isn't that going to be the fundamental fact of life going into these negotiations?

CLARK: Wolf, that's exactly right because these negotiations, these discussions really will reflect the distribution of power on the ground.

Now, the truth is the Northern Alliance is not all that unified. It has different factions and it has different states supporting it. Pakistan, of course, is not part of that. Pakistan will be supporting the Pashtun attendees at the conference and they're be a lot of jostling.

And so the real thing we want out of this conference is we want to reduce the possibility of further conflict between the Northern Alliance and the southern tribes and focus them on completing the job in Kandahar and getting us the information and taking action against Osama bin Laden.

BLITZER: All right. California, go ahead please with your question. QUESTION: Yes, hi. I just want to know that a lot of the problems that actually started with the Northern Alliance many, many years ago. How can they be trusted now.

And also when it comes to rebuilding Afghanistan -- I am from Afghanistan. How often are the Northern Alliance, to a lot of educated Afghan-Americans living in this country, actually going over and helping with the rebuilding of Afghanistan?

BLITZER: All right, that's a two-part question. Let's ask the first part to General Shepperd this notion of trusting the Northern Alliance.

Do you think the military, U.S. military on a day-to-day basis has no choice but to trust them?

SHEPPERD: Well, I'm taken back to the words of the former first lady Barbara Bush, you dance with the one that brought you. That's the only game in town. It's their war. They are the most useful to us right now and we're the most useful to them.

It's important that we do what we can with the military forces that are on the ground there and also try to instill and take our American values to the settlement that's made and then the whole outcome of this is the political settlement at the end.

That's what everyone is after, but right now the Northern Alliance is our only -- is our only game in town. We have to bring the Pashtuns from the south into it, but we do what we can right now.

BLITZER: And we can only assume, General Clark, that the new, whatever new leadership takes hold in Afghanistan is going to welcome input from Afghans living in the United States, Americans of Afghan ancestry who, of course, had the door closed to them during the Taliban regime.

CLARK: Well, I hope our government will do everything it can to impress on the Northern Alliance that it has to take care of the people of Afghanistan. It has to deal with the United Nations, it has to set up procedures to receive the many offers of aid and the many volunteers who'll be coming from all over the world to help this country. It can't just wall it off and continue with business as usually as it was during the 1990s. This has to be different now.

BLITZER: Kelly, you were a former special operations officer. You know that they are on the ground in Afghanistan. The CIA also has its own personnel on the ground. There are other that they call contract employees working there.

How do they get along on an individual -- is there a rivalry or is there a cooperative element there between the CIA and the U.S. military, for example?

MCCANN: That's a good question. At the operator level there's very usually not any kind of rivalry at all. But at the organizational level, there starts to be some head banging. We always want to protect sources and methods. And so information is carefully guarded because you'll lose information if you give up a way that you got it.

So I think now you're seeing some barriers drop down at more mid- level manager levels and senior level managers level because of need. At the operator level it never has been.

BLITZER: I want to ask both of our other generals that same question, but we're going to take a quick break. More of our questions, more of your phone calls for our military analysts when we return.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're taking more of your questions about military operations in Afghanistan, the campaign to chase down Osama bin Laden.

General Clark, let me begin with you. As you well remember, during the Vietnam War, relations between the CIA operatives who were working in Vietnam and the U.S. military weren't always the best. What's your assessment right now of what's going on in Afghanistan?

CLARK: Well, I think it's much better today than it's ever been in the past. We've done a lot of practice over the last decade and we've worked together in the Balkans on a steady basis with the agency. And by and large, there've been very problems there. And I think it's better now than it's ever been.

BLITZER: The CIA operatives, General Shepperd, who are on the ground in Afghanistan, who do they report to, the Central Command, which is running the military operation or their bosses at CIA headquarters in Langley, Virginia?

SHEPPERD: They report to their bosses at CIA. On the other hand, the CIA has liaison officers both in the field and also at headquarters. Again, what General Clark and Kelly have said is exactly right, the relationship has never been better and kind of analogous to what Tom Ridge is facing in the United States, as he tries to get all of these agencies to cooperate.

The reason to cooperate has never been more important right now and we see that cooperation. At the operational level, it's no- brainer. At the headquarters level, that's the problem, but it's getting better.

BLITZER: And basically, and you can correct me if I'm wrong, Kelly McCann, most of these CIA operatives who are working on the ground -- at least, a lot of them -- do have military backgrounds.

MCCANN: It depends on what directorate they come out of, but yes, a lot them do have military background. Those that don't, are brought up with kind of education processes, so they understand the military, at least, if not be been in the military.

BLITZER: All right. Let's take another caller from Virginia. Go ahead, please.

CALLER: Hi. Do you foresee an invasion of Kandahar by the U.S. Marines. If so, when?

BLITZER: All right. Well, let's General Clark answer that easy question. I'll repeat it, in case you didn't hear, General Clark. Do you envisage an invasion of Kandahar by U.S. Marines and, if so, when?

CLARK: That's a really tough question because it's speculative. Obviously, we'd prefer not to have the U.S. Marines invade Kandahar. What we'd like to have is the people in Kandahar themselves overthrow the Taliban. If that won't happen, then we'd like the other Pashtun tribes to work against the Taliban and free Kandahar.

As a last recourse, if we thought that Osama bin Laden was inside Kandahar, we might contemplate putting some Marines there. But by and large, we want to keep our troops out of city fighting. That's really not our business. It's really the business of the people of Afghanistan. And our primary interest that we always have to go back to here, is we want to take out the al Qaeda network. That's what we're in this operation for.

BLITZER: All right. Let me ask General Shepperd a specific question.

And when do you send in the Marines to undertake an operation like this? When do you send in the Delta Force or Rangers? When do you send in infantry and other lightly armed U.S. army personnel?

CLARK: A real simple answer is whenever General Franks is ready. What you don't want to do is just lash out and send somebody in on some kind of pin prick. You have to have a plan. The plan is the responsibility of General Franks and he will use the forces necessary.

What we've seen so far is the very smart use of air power, the very smart use of special forces -- all the services contributing. The Marines are there, but they haven't been used yet, but they will, if General Franks thinks they're necessary.

BLITZER: And on the special capability in this regard, as well.

All right. Let's take another caller from Michigan. Go ahead.

CALLER: Yes. I'd like to know what -- if they find bin Laden, what will they do with his family, his wives and children?

BLITZER: All right. Who wants to answer that question? General Clark?

CLARK: Well, they're not -- they won't be complicit in this, and so they'll be released, I would assume. And if they're Saudi citizens, they'd probably go back to Saudi Arabia.

BLITZER: Because they, obviously, are not necessarily responsible...

CLARK: Right.

BLITZER: ... for the misdeeds of their father or husband or whatever.

CLARK: Exactly.

BLITZER: Kelly, as you look at the overall situation right now, give us your assessment. How long is it going to take to get the job, the military job in Afghanistan done, meaning Kandahar, the remaining areas, under friendly control?

MCCANN: Better to ask the General at their pay grade, than mine. But my opinion is that this could go anywhere between months and up to a year.

I mean, it all depends on the aggressive nature of what General Franks decides to do. He's been successful so far. And really, the only people that have the tea leaves are the ones that have all the intelligence, all the diplomatic parallel tracks, all the political ramifications of what they're doing in front of them and that's, you know, the fabulous four that we've got in office. So...

BLITZER: Is...

MCCANN: ... hard to predict.

BLITZER: Is -- General Shepperd, there's a period now of a long, sustained lull, if you will, where there's not going to be a lot of movement or are these dramatic, almost breathtaking military developments we've seen over the past two weeks, is that going to continue?

SHEPPERD: I think Kandahar will come about rather quickly, but it'll in the neighborhood of another couple of three weeks to get that done. It may fall soon, but then you've got to consolidate control over the whole country. You're going to have pockets, your going to have guerrilla warfare breaking out. But our focus will then be on getting bin Laden. And I think it's going to happen in the short term, rather than the long run.

BLITZER: General Clark, in the short term, the airstrikes, the U.S. bombing campaign, will continue, but it'll be focused mostly around Kandahar, right? There's no need elsewhere around the country. Am I wrong?

CLARK: That's -- I think that's right. It will depend what the intelligence shows and there are probably special forces teams elsewhere. We should be sifting through all the information and we should be going against any targets, anywhere in the country, where we find small pockets of Taliban or al Qaeda holed up and we'll bring the special forces in with ground troops there, with the local ground troops. And then, if we need air support, we call it.

So probably Kandahar is where most of it's going to come, but probably not all of it there. BLITZER: OK. We're going to take another break. We still have more to talk about, more of your phone calls, more of your questions. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Let's take another caller from New Jersey. Go ahead, please.

CALLER: Hi, Wolf. I had a question about the Taliban surrenders that we've been seeing in the major cities.

I guess my question is, what kind of controls are there on that kind of thing? And I'm thinking, how at risk is the operations in terms of our final objectives?

The thought occurs to me that we, you know, I don't mean to sound naive about the different factions, but you know they could change uniforms, they could just kind of come out and blend into the crowds and you know, end up being the people that we're actually looking for.

BLITZER: You know, General Clark, there's been a lot of reporting out there, as you well know, that some of these Taliban soldiers are open to the highest bidder, if you will, and you can't trust them.

CLARK: Well, I think that's true. There's also been reports that Pakistan has been flying the aircraft in and pulling people out of Kunduz at night. We don't know what the validity of those reports are. But it does illustrate that the caller has made a very valid point, this is a very difficult part of the operation. And no one could ever assure us that we're going to be 100 percent effectiveness in terms of getting the information out of these people.

There are going to be people who slip through the net. There will be people who are there that aren't talked to fast enough, and there will be people who give us partial truths that we don't correlate and act on soon enough.

That's the way it is. It's always a matter of inefficiency in operations like this. But consider the alternative. I think it's been pretty good to get some of these people to surrender. We're getting some information from them. We're taking some of them out of the fight. And that's all to our advantage.

So we will have to do the best we can, recognizing we will never be perfect in something like this.

BLITZER: All right, Canada, go ahead please with your question.

CALLER: Hi, how are you doing?

BLITZER: Good.

CALLER: My question actually is about the complex tunnel network that everyone is talking about and that Osama bin Laden could possibly be using them for hiding and what have you.

Do we have any knowledge that any of these tunnel networks may lead into other countries such as Pakistan?

BLITZER: I think that's a good question. What about that, General Sheppard?

SHEPPERD: We do have a lot of information on the tunnel complex there, a lot of it gained from the Soviets, a lot of it gained from other people. And we will also get a lot of information from some of the prisoners that are changing sides and are prisoners from the other nations there.

The important thing about the tunnel complexes is, true, there's thousands of caves and you're not going to go from cave to cave. You're going to get intelligence about where he is, and it has to be a complex cave complex to house all of the people that are going to have to support and guard bin Laden.

So we're going to focus our attention and we know a lot about the complex from a lot of sources.

BLITZER: Kelly, the U.S. special operations forces may have to go into those caves and do a cave by cave search for Osama bin Laden, other members of al Qaeda. Would they just go in with, you know, their night vision goggles and stuff like that? Or do they use of gas or smoke to try to smoke these people out? Or do you just continue with those 5,000 buster -- those concrete bunker busting bombs?

MCCANN: D, all of the above. I mean, it depends on the space, but we haven't even begun to display the kinds of weapons that we have. We have less lethal weapons that can immobilize. We have all different kinds of mixes that we would task organize the force, but we would also have task organized weaponry.

I think what you will see, Blitz, is -- Wolf -- is that if we do it, won't be a blitzkrieg kind of thing where we're just going to you know, mass outside the front of the cave and run inside. This is going to be a measured campaign, and we won't involve ourselves in very lightly at all.

And again, as the generals have said earlier, if possible we will have the Northern Alliance there.

BLITZER: All right, let's take another caller from New Jersey. Go ahead.

CALLER: Yes, my call is for General Shepperd. I was in a National Guard Armored division and we worked closely with the A-10, and I was wondering if the A-10 was used in Afghanistan. And if it did, how did it fair? And does it change anything about retiring time? It was a quite an aircraft, and we really loved it.

SHEPPERD: Well, I've got to leave the A-10 retirement decision to the Pentagon. On the other hand, it's a good airplane. It has not been used in Afghanistan because it's not been needed. Right now what's needed are bombs. And of course the A-10 does carry bombs, but we've got better airplanes to operate at long range.

Now one possibility with airfields being secured in surrounding countries, is you could in the A-10 for a sustained ground campaign, but it's not been needed so far, and that's why it's not been used.

BLITZER: General Clark, how -- when we get these reports coming out, as we are today, from a Time Magazine, reporter, or colleague of ours from our sister publication, Time Magazine suggesting that the U.S. has suffered its first combat causality in Afghanistan right now. The Pentagon has no indication that any military personnel as opposed to CIA or contract employee has died in combat.

How much of an obligation does the U.S. military have to inform the American people through the news media of casualties?

CLARK: Well, in general, the U.S. military will probably inform the public, but it won't do so until it can run down all the facts, until the families, next of kin have been notified. And in some cases, if it's special operations and it's a classified mission, nobody beyond the immediate family will be told, and even the immediate family may not know the precise circumstances.

So there is an obligation to inform the public, but it's not 100 percent full disclosure.

CALLER: Yes, I find it very fascinating that a Muslim country, such as Afghanistan, can actually lead the world opium production.

So now that we're in there, what are going to do to stop this -- up to 75 percent of the world -- production of opium poppies, this terrorist activity that's been deployed in our country in terms of billions and billions of dollars, not only the overt attacks that we've had but the covert attacks with the opium production producing heroin that's literally destroyed the infrastructure of our own country?

BLITZER: I don't think, Kelly McCann correct me if I'm wrong, there has been any orders that I've heard for U.S. military personnel or special operations to CIA to go out there and destroy or burn these opium fields.

MCCANN: Some of the first strikes were in the opium fields, very early on. And I think what you will see now is a lot of the opium warehouses are in Pakistan.

So I think left unchecked, the caller has a great point, which is, world wide, if you think about al Qaeda, this whole mixture of terrorism, criminal activity, re: drugs, OK, and, you know, against U.S. efforts, is a very sticky wick. It's very hard to get your hands around it.

So left unchecked, without NGOs in there, they're going to help restructure Afghanistan, help the people, I think you will see a return of the opium trade. Right now it's in check because of the war, a little bit, anyway.

BLITZER: General Clark, what, if anything, should the U.S. government be doing about opium production inside of Afghanistan?

CLARK: Well, a number of countries, including the United States government, have made offers to assist the Northern Alliance or the government of Afghanistan to rebuild, and I think part of that assistance has to come with the strings that something is going to be done to inhibit opium production.

Now the Taliban did sign an agreement and they did reduce opium production, but they had warehouses full of it already. That's all got to be policed up. And Pakistan's got an obligation here to go after the warehouses on Pakistani soil. We're going to insist that -- we're going to work very hard on this part of Southwest Asia and clean it up.

BLITZER: And it's not just, General Shepperd, in Afghanistan. This is a problem, of course, that's worldwide, and some have compared this war on terrorism to the war on drugs.

The war on drugs, as you well know -- and General Barry McCaffrey, who was a former czar, drug czar, knows this war is a losing war, if you will.

SHEPPERD: Well, it's been a losing war so far. Maybe this is the impetus we need to go after it, because this criminal activity, as Kelly has said, is very much tied into the terrorist networks. It finances a lot of it, in Afghanistan and other places, and so perhaps we will use this as a reason, if will you, to go after drug traffickers in many, many countries, supported by the law enforcement of those countries, who desperately want them out.

BLITZER: OK. We're going to leave it right there.

General Shepperd, Kelly McCann, General Clark, always good of all three of you to join us for our special third hour question-and-answer session. We appreciate it very much.

Meanwhile, as Taliban forces lose their grip on Afghanistan and trucks are moving in to assist that country's refugees, we'll talk with a guest involved in the relief efforts.

LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

COLIN POWELL, U.S. SECRETARY OF STATE: The vast majority of the Afghan people awaken hungry, cold and sick every morning.

(END VIDEO CLIP)

BLITZER: Secretary of State Colin Powell speaking of the refugee crisis inside Afghanistan. Joining me now for some insight into the needs of Afghan's refugees, in Syracuse, New York, Catharine Bertini. She's the executive director of the U.N. World Food Programme.

Catharine, thanks for joining us.

And what is the biggest need right now, from your vantage point, people who are hungry inside Afghanistan?

CATHARINE BERTINI, U.N. WORLD FOOD PROGRAMME: The biggest need is for some sort of stability in the different communities around the country, there's a lot of banditry, there is still some fighting. And the commercial truckers in some areas are very reticent about moving in food and other items.

So that's the biggest need at this point in time.

BLITZER: I take it the airdrops were not necessarily all that successful in providing food to those who need it most.

BERTINI: I think the U.S. military airdrops were designed to get to some of the people who were cut off, but they say that it was only going to reach one-half of one percent of the needs, because the needs are for six million people, which means 52 thousand tons of food a month, it's really huge.

So, any kind of food getting into the country is good, but the massive amounts necessary have to go in by truck.

BLITZER: And how dangerous of an operation is it? It sounds like the situation, with all the land mines and the fighting that's still going on in various parts of the country, that that is not a simple ordeal.

BERTINI: It's not simple. The World Food Programme is responsible for getting food into the country for the 6 million people, we've been successful in getting enough in for the people in the country, but now what's critical is the distribution inside. And it has been critical for some time. Because of the insecurity, some of the nongovernmental organizations, as well as the U.N. staff, World Food Programme, and others, our staffs have been limited. And also the vehicles available have been limited, many had been stolen in the past.

So we have to kind of rebuild an infrastructure inside Afghanistan, with major assistance from local nongovernmental organizations, as well as international NGOs.

BLITZER: Are you suggesting that there are not enough trucks or individuals available right now to get this process really underway?

BERTINI: Well, there are enough trucks to get the food inside, not only to the big cities, but some of the smaller cities. But in some areas, there are no vehicles and no people willing to work at the present time, because there's too much banditry. So, in those areas, what's absolutely critical is that there's some sort of stability. But those are in a minority, in terms of the amount of people affected negatively, but it is a big challenge, because we have not had enough vehicles in country in the past. We have to get a lot more in, as well as more staff, because the international staff for all the organizations had gone out of the country. And now they're starting to go back in.

But we all have very, very brave Afghan staff members, women and men, who have been working throughout this difficult time. Now many of the women are able to come back to the offices, and they have been joyful days last week, when women are returning to the office, because they haven't been able to even work out of the office for the last five years.

BLITZER: Your U.N. World Food Programme, is there enough staff, are there enough people who are willing and able to go in there and help to get the job done?

BERTINI: Well, there are enough local staff, there are enough people inside Afghanistan willing to work. We are trying to recruit more of the nongovernmental organizations, who had been in the country before September 11, to come back.

About 130 NGOs were working with the World Food Programme in early September, and now there are still under 50. So we're trying to encourage more NGOs to come back, so that we can expand this food distribution system, because, after all, there was food going into the country even during the summer because of the insecurity, because of the war, because of the drought, because of the desperate poverty of the people, but now the needs are even greater, and we have to match that with an internal distribution system. I think it can be done, but, as I mentioned, the stability issue is really critical.

BLITZER: All right, let's take a caller from New Jersey, go ahead, please, with your question.

CALLER: All right, Wolf. Yes, my question is, OK, how can we keep, basically, the warlords from intercepting these food drops? I've heard a lot about the drops being intercepted by these warlords and being sold on the black market.

What can we do to ensure, basically, that these drops go into the hands of the people that need them, and not on the black market?

BLITZER: Good question.

Go ahead, Catharine.

BERTINI: Well, drops -- there are different ways of doing food drops, and, in the most insecure areas, when one does a food drop from an airplane very high up, you have no control over who gets the food. Your only targeting can be the general area where you think people are most at risk. And there's nothing that anyone can do. The reason why you're doing a drop, rather than moving food in by vehicle, is because you can't put any staff on the ground to assist. But you can also do a food drop -- and we may contemplate this later in the winter -- where an airplane, a C-130, a very big plane, flies low and drops food out of the back of the aircraft. And in that case, there are staff on the ground in kind of a football field-size area, who manage it and manage the distribution of it to the local people.

But the best way to get food inside Afghanistan or anywhere else is by truck. And we have been successful in moving food into the country. Now we have to make sure we can spread it all around the country where it is appropriate. And in that way, we have staff members -- World Food Programme, the U.N., UNICEF, others do this with food and with non-food items, but also with our NGO partners, and they manage the distribution to make sure that it goes to those who are most in need.

Just to give you one example, right now, in Kabul, we have 2,000 women going door to door. And we're thrilled -- they're thrilled that they can work now, finally, but they're going door to door, so that we assess where the greatest needs are, so we can make sure that we're getting food and other items that are necessary to the people in the households in greatest need in Kabul.

BLITZER: I take it, though, that winter months coming, it's starting to get very cold right now and there potentially could be some snow in parts of Afghanistan. This is going to further complicate your effort.

BERTINI: Yes. The snow will complicate the efforts, but of course, the snow is not new and Afghans are used to working, even within the snow. All of the major cities are accessible, even during the heaviest snows, but it is -- of the smaller cities, the smaller areas that are not accessible. And part of our plan now is to try to get enough food pre-positioned in these outlying areas, so that it will be there to be able to be fed to people, even during the winter.

If we aren't successful in getting enough food in that way, that's when then we would go back to the possibility of very targeted and organized airdrops.

BLITZER: Is money a problem right now, to pay for all of this food? You heard U.S. officials earlier in the week seek donations, contributions from individuals and from nations around the world. Is money a problem to come up with the funds to pay for all the food?

BERTINI: We could always use more assistance. So far, we're about 65 percent resource for the food, the U.S. being the largest donor, but many other countries giving food or giving money to purchase food in the region, which is very important and it's easy to move that food locally and it also supports the local economies of the countries surrounding Afghanistan.

We have a big transport operation -- some of which I have been describing -- and that's about 75 percent resource, but that -- the transport costs are much higher than we had anticipated, so we will be having to ask for more money. People can contribute in many ways. First, they can thank their government, wherever they live, for their contribution, and encourage the government to give more. Second, they can contribute to a nongovernmental organization, as long as they check to ensure that that agency is actually working inside Afghanistan. Third, they can give to the Red Cross Red Crescent. And fourth, they can give to Friends of the World Food Programme in the U.S. or friends of UNICEF or UNHCR.

BLITZER: All right. I'm sure our viewers will be interested. And good luck to you, Catherine Bertini...

BERTINI: Thank you very much.

BLITZER: ... of the U.N. World Food Programme. We appreciate it very much.

BERTINI: Thank you.

BLITZER: Thank you.

And just ahead, Bruce Morton's "Last Word."

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT: The country has no experience in democracy. It has no common language. It's people speak Pashto and Dari and Farsi and several more.

(END VIDEO CLIP)

BLITZER: When the war in Afghanistan is over, how difficult will it be keeping the peace?

(COMMERCIAL BREAK)

BLITZER: Time now for Bruce Morton's "Last Word" on a post- Taliban Afghanistan.

(BEGIN VIDEOTAPE)

MORTON (voice-over): Afghanistan, all the experts agree, will need a broad-based government to replace the Taliban. But probably no one has less experience with broad based governments than the Afghans.

The country has no experience in democracy. It has no common language. It's people speak Pashto and Dari and Farsi and several more. So putting some sort of broad-based coalition together will probably be difficult.

What they will need in the meantime is an international peacekeeping force to keep the various factions from each other's throats. This is not your traditionally U.N. peacekeeping force, a thin line of lightly armed soldiers in blue helmets monitoring a border. That kind of peacekeeping works only when both sides want it to. It worked in the Golan Heights because neither Syria or Israel wanted war; did not work in South Lebanon where some groups did. Afghanistan has more than two sides, and some of the probably will want to fight.

So what they will need is a tough, heavily armed international force that can enforce the peace, something like what NATO has in place in what used to Yugoslavia, complete with tanks, artillery and airplanes.

It would help if the force were mostly Muslim from countries like Turkey, which has a well-trained army, and obviously the force shouldn't look American. The U.S. can contribute logistical and air support, but U.S. troops shouldn't be patrolling streets since the U.S., after all, is the prime villain in the Taliban view of the world.

With a peacekeeping international force in place, the U.S. and its coalition partners will be able to get on with another big job, preventing famine in Afghanistan. The end of fighting will mean roads can open, food and other supplies can arrive in greater quantities than had been possible before.

The coalition's official mission will still be find Osama bin Laden, break up al Qaeda, but keeping Afghanistan from starving this winter will be at least as important, and it's something the West ought to be able to do. Catching spies and terrorists is tricky. Bringing in food and medicine plays to Western strengths -- airlifts and so on.

(on camera): None of this will end terror, of course. Islamic jihad and Hezbollah and other organization will still be in business, but peace and food would be helpful changes in what has been a very unhappy part of the world.

I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thank you, Bruce.

And time now for a look at what's on the cover of this week's major news magazines in the United States.

"Newsweek" looks at, "Where We Get Our Strength: The Bushs Speak Out On the War, His Emotions and Her New Role," with the president, the first lady and their dog on the cover.

"TIME" magazine examines "Lifting the Veil: The Shocking Story of How the Taliban Brutalized Women in Afghanistan. How Much Better Will Their Lives Be Now?" -- on the cover.

And on the cover of "U.S.News and World Report," a story we've been covering all day, the "First Human Clone."

That's your LATE EDITION for Sunday, November 25. Please join us again next Sunday and every Sunday at noon Eastern and during the week.

I will, of course, see you twice a day at 5:00 and 7:00 p.m. Eastern for two editions of Wolf Blitzer Reports.

Until then, thanks very much for watching. I'm Wolf Blitzer in Washington.

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